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Straits Times
13-07-2025
- Business
- Straits Times
China's high-end hotels set up makeshift food stalls, slash prices as Chinese consumers cut down on spending
Sign up now: Get ST's newsletters delivered to your inbox ZHENGZHOU, Henan – On a sweltering 36 deg C evening, a man stood under a makeshift tent outside his hotel, scooping a Chinese summer delicacy into takeout boxes – piping hot xiao long xia, or crawfish – selling for just 38 yuan (S$6.80) per 500g. Next to the man, who is the hotel's general manager , chefs in tall white hats carved up roast ducks – 35 yuan for half and 60 yuan for a whole – for the streams of bargain-hunting customers. The bustling scene outside the five-star Noble International Hotel, which has gone viral on Chinese social media, stood in sharp contrast to the subdued atmosphere inside the premises. Although it was nearing dinnertime, the in-house restaurant offering an all-you-can-eat buffet for 258 yuan drew barely a handful of diners. In the marble-floored lobby, most of the people there were either seeking respite from the heat outside or digging into their takeaway meals. Across China, from Hangzhou to Changsha, more high-end domestic hotels are swapping chandeliers for street lamps, setting up food stalls outside their doors to sell hotel-made dishes at bargain prices as their dining rooms sit empty. These makeshift set-ups are a stark reflection of an industry under pressure, as consumers tighten their belts, demand for wedding banquets shrinks, and a surge in new hotel openings outpaces the recovery in travel and dining. An economic slowdown, a tight job market, high youth unemployment and a prolonged property slump have led many Chinese to cut back on their spending. Furthermore , an ageing population and a growing reluctance among young adults to marry have driven wedding numbers down. The long queues and bargain prices at Zhengzhou's Noble International Hotel's food stall have become a sensation on Chinese social media. ST PHOTO: MICHELLE NG In a fresh blow to the high-end hotel sector, which generates revenue partially from corporate functions and business banquets, Chinese authorities in May 2025 renewed a sweeping push for frugality, urging officials and state-owned firms to rein in extravagance and hospitality spending. Such hotel-operated food stalls are merely the latest stopgap measure to 'ride it out through these low months', said Mr Sun Bo, general manager of Shaoxing International Hotel, a five-star hotel in eastern Zhejiang province. His hotel was one of the earliest to set up a food stall outside its premises in mid-June. Mr Sun told The Straits Times that he knows relying on food-stall revenue is not sustainable in the long term, as the 'profit margin is very, very low' since they use the same quality ingredients as their in-house restaurants. 'These few months, since our chefs and staff are free, we might as well drop our profit margin for the time being and let more people get to know our hotel, try our dishes and drum up some marketing,' he said. To cope, some struggling hotels, such as Banyan Tree in Chongqing , are selling off their assets. In Shenzhen, the DoubleTree by Hilton , launched a 79-yuan 'leftover blind box', repackaging unsold buffet items that would normally cost more than 200 yuan. Zhengzhou's Noble International Hotel's general manager, Mr Lei Yuming, spoke to Chinese local media about concerns that operating a street stall might be considered unbefitting for a five-star hotel. To that, he said: 'We don't think there's anything wrong with a five-star hotel doing this… Honestly, how much is 'face' worth?' When ST visited on July 9, Mr Lei declined to be interviewed, saying that he was not authorised to speak to foreign media. Mr Guo Xiaobao, manager of a Chinese liquor Maotai retail store on the ground floor of the hotel, said he was initially sceptical of the hotel's food-stall idea but quickly understood why it was necessary, having seen the hotel's business decline first-hand and his sales suffering due to the reduced footfall. 'To put it bluntly, if you can't survive, what 'face' is there to save?,' he said. 'If the hotel doesn't adapt, they will lose both their 'face' and employees.' Mr Tao Zhao, managing director and head of hotels and hospitality group at JLL Greater China, told ST that high-end hotels are now under increasing pressure to cater to a more value-conscious market in an era of 'consumption downgrade'. Chefs and hotel staff scooping xiao long xia, or crawfish, and other dishes into takeout boxes at Zhengzhou's Noble International Hotel's food stall. ST PHOTO: MICHELLE NG 'Social trends such as fewer weddings and tighter corporate travel and dining budgets have eroded some of the traditional revenue pillars that many full-service hotels once depended on,' he said. Mr Zhao said the recent push for frugality and fewer formal banquets is more of a 'wake-up call' than a death knell. 'This presents high-end hotels with an opportunity to diversify away from banquet-heavy models and focus more on flexible, true market-driven and guest-centric offerings,' he said. In the third quarter of 2024, five-star hotels across China averaged just 60.7 per cent occupancy, leaving nearly 40 per cent of rooms empty. Overall revenue dropped 9.3 per cent year-on-year to 16.95 billion yuan, with food and beverage revenue falling 14.6 per cent, according to data from the Ministry of Culture and Tourism. There are no publicly available statistics for more recent quarters. By the end of 2024, China had around 370,000 hotels with 18.5 million rooms, up nearly 30,000 hotels compared to the five-year period before the Covid-19 pandemic, according to an April 2025 report by China Report Hall, a Beijing-based market research institute. Yet, domestic travel in 2024 remained 6.5 per cent below pre-pandemic 2019 levels and inbound tourism lagged by 2.8 per cent. The imbalance in supply and demand has led to a broad industry slump with high-end hotels now stuck in a price war. Ms MingYii Lai, a strategy consultant at Shanghai-based market research firm Daxue Consulting, said the rise of the food-stall phenomenon among high-end hotels is just as much about creative marketing as it is about a revenue lifeline. Hotels and restaurants can leverage existing supply chains and repurpose banquet ingredients for street food to offset losses from low banquet demand, said Ms Lai. The long queues and bargain prices at Zhengzhou's Noble International Hotel's food stall have gone viral on Chinese social media. ST PHOTO: MICHELLE NG 'Intermittent pop-ups from high-end hotels lower entry barriers for Gen Z and the aspiring middle class while maintaining luxury appeal,' she added , referring to the generation born in the mid-1990s to the early 2010s. An example is how The St Regis in Shanghai transformed its food truck into a permanent daytime mobile bar parked next to its cafe, to attract the younger, more trendy crowd, she said. Amid the bustle at Zhengzhou's Noble International Hotel's food stall, a chef from a nearby restaurant stood quietly watching. Mr Liu Yang, 29, said his bosses had shown him the viral clips on Douyin, the Chinese version of TikTok, and wanted to see the fuss for himself. 'I can understand why they are doing this, even though they are a five-star hotel,' said Mr Liu, who works in Jiu Jiu Yuan, which specialises in wedding banquets. 'In this economic downturn, surviving is more important than 'face'.' 'Our business has also been hit badly. Before the pandemic, our turnover was several million yuan a month. Now , it's about half that. I've been cooking far less,' he said. First in line at Noble International Hotel's food stall was Ms Chang Yan, 38, a Zhengzhou-native who started queuing at 3pm, even though the stall officially opens around 5pm. 'The macro environment is tough, but the hotel found a way to connect with ordinary people while earning some income, which I think is a good thing,' said the hotpot ingredient supplier and content creator. Hotpot ingredient supplier and content creator Chang Yan, 38, a Zhengzhou-native who started queueing up at 3pm at Noble International Hotel, two hours before the food stall opened on July 9. ST PHOTO: MICHELLE NG Ms Lu Lu, a 35-year-old homemaker, said the draw was the five-star quality food at low prices. 'Locals like us won't step foot into a five-star hotel like this, much less eat their food. Now that they have made it accessible, what's not to like?' she said. By 7pm, two hours after the stall opened, the crowd-favourite xiao long xia – the hotel prepared 250kg that day, a kitchen staff to ld ST – was sold out, and other dishes were running low. Some of those still in line who were turned away grumbled that they had queued up for nothing, while others loudly asked what time they should come back the next day. Mr Liu, the chef from the nearby restaurant who had been quietly observing, said: 'I'm going to report to my bosses my findings today. This is quite interesting, and I think we can emulate this food-stall setup to help improve our revenue.'
Straits Times
24-05-2025
- Business
- Straits Times
China eases tax refund rules for tourists
Since April 27, tourists who spend at least 200 yuan (S$36) on the same day at the same store are eligible for the instant tax refund. ST PHOTO: MICHELLE NG China now offers instant tax refunds to tourists in bid to boost consumption. Here's how it works – Visitors to China might soon find it easier to claim tax rebates at the store's checkout – and that could mean a little extra cash to spend during the trip and fewer queues at the airport. Experts say this might boost the economy, but the key is getting more retailers on board the programme. China recently revised its tax rebate policy to allow foreign tourists to receive their tax refunds instantly at eligible stores, rather than doing so only at the airport, a nd also lowered the minimum spending for such claims. Since April 27, tourists who spend at least 200 yuan (S$36) on the same day at the same store are eligible for the instant tax refund, down from the previous 500 yuan. The maximum rebate amount for a cash refund has also been raised from 10,000 yuan to 20,000 yuan. Refunds can be instantly received through mobile payments such as WeChat and Alipay's digital wallets, credit cards and in cash. Previously, tourists had to get their paper forms and receipts in order, and could get the refunds only at the tax refund counter at the airport right before they left the country. The catch? Not all shops offer this service, but the Chinese authorities said they are working to broaden the list of such tax-refund stores in major shopping areas, pedestrian streets, tourist sites, resorts, cultural venues, airports, passenger ports and hotels. Goods eligible for refunds include luxury items, time-honoured Chinese brands such as traditional Chinese medicine pharmacy Tong Ren Tang and silk store Ruifuxiang, craft, cultural and heritage items, renowned Chinese consumer goods and sports products. Food and beverage stores are not included in the list. Chinese state media China Daily noted that a tourist who buys a Huawei Mate XT smartphone with an original price of 23,999 yuan (US$3,299) including tax, can receive an in-store refund of about US$360, which is enough for a high-speed train ride from Beijing to Shanghai and one-night luxury hotel stay. The policy tweak aims to boost inbound tourist consumption in the world's second-largest economy by getting visitors to spend more and sooner, as Beijing attempts to cushion some of the damage from the ongoing US-China trade war. The revised model was piloted in several cities such as Beijing, Shanghai and Guangzhou, before being rolled out nationwide in April. Ms Shan Guo, a partner at business consultancy Hutong Research, said the departure tax refund, according to China's current value-added tax rate (VAT), is around 11 per cent. 'The revised policy means tourists have 11 per cent more cash to spend in China, instead of bringing it home after getting it upon departure,' she said. Assuming that tourists spend all the cash refunded, Ms Guo estimated that it could translate to another 0.05 per cent support to China's gross domestic product (GDP) – a modest figure but a boost nonetheless. 'The upside could be higher if tourists spend more than what they were refunded and if the policy attracts more visitors. Cities such as Shanghai could benefit as it is usually tourists' first and last stop in China, as well as the go-to place for luxury shopping,' she said. A sign near the entrance of luxury shopping mall SKP in Beijing indicating that the mall offers tax rebates to foreign tourists. ST PHOTO: MICHELLE NG In 2024, China's inbound tourist spending accounted for about 0.5 per cent of China's GDP, compared with 1 to 3 per cent in major economies. Chinese Vice Minister of Commerce Sheng Qiuping highlighted it as an area with significant growth potential on April 27 when announcing the measures. A total of 132 million tourists spent more than US$94.2 billion in China in 2024, an increase of 77.8 per cent from 2023, according to the National Bureau of Statistics. With the policy in place, Ms Guo noted it is now a matter of getting more shops on board the instant tax rebate programme as some retailers may not feel that its benefits justify them offering this service. A check by The Straits Times in Beijing found that high-end shopping centres, SKP and China World Mall, have an instant tax refund counter, marked with a large blue sign, where tourists can get their refunds. At Sanlitun Taikoo Li, a trendy shopping area popular with the young, most luxury international boutiques such as Gucci and Moncler offer the service. But most local Chinese brands, such as popular perfume brand To Summer, do not. The rollout of the programme appears uneven, as smaller malls have not yet come on board. At Silk Street, a tourist-centric shopping mall in Beijing selling silk garments, leather goods and traditional handicrafts, only one store selling porcelain tableware offered the service. Auratic, a Chinese porcelain tableware brand, was the sole store in Silk Street mall in Beijing that currently offers in-store tax rebates to tourists. ST PHOTO: MICHELLE NG Some sales assistants were perplexed when asked if their shop offered in-store tax rebates for foreign tourists, saying they had never heard of this new policy. But three sales assistants told ST that they have been informed that there will be a mall-wide push to implement the in-store tax refund, although the timeline is unclear. A sales assistant selling Chinese brocade jewellery boxes, who wanted to be known only as Ms Wang, said: 'It'll be good for business because only tourists buy these items as souvenirs. But whether our in-store tax rebate system will be ready in two weeks or two months, I cannot say for sure.' How to get the in-store tax refund Spend at least 200 yuan (S$36) on the same day at the same store. Present your passport at the checkout. The store fills in a digital tax refund application form, which takes in your credit card number or e-wallet details, and does the tax refund on the spot or may direct you to a centralised refund counter within the mall or shopping area. At the refund counter, receive your funds via WeChat and Alipay e-wallets , credit cards or in cash. At the airport before departure, present the digital form and receipts at the e-tax refund kiosk to validate your purchases. If you do not do this, your refund might be reversed and charged back to your credit card or e-wallets. Michelle Ng is China Correspondent at The Straits Times. She is interested in Chinese foreign policies, property trends, demographics, education and rural issues. Join ST's Telegram channel and get the latest breaking news delivered to you.
