Chinese luxury hotels forced to cut prices due to over-expansion. (Photo : Getty Images)
China's hotel room supply glut is finding a silver lining in hip and young travelers looking for a more distinctive type of accommodation.
The country's boutique-hotel trend is finally gaining ground in the country, serving as an antidote to its worsening oversupply crisis, The Wall Street Journal wrote in a report.
In 2009, China recorded an 11 percent annual average jump in hotel rooms, rising from 2.02 million to 3.37 million in 2015, The Wall Street Journal said, citing figures from the National Bureau of Statistics. The surge in the number of rooms has hit profits, with the average daily room rate dipping 2.5 percent from January to September last year.
Meanwhile, some hotel owners are banking on the ballooning demand for trendy lodgings that do away with the upscale offerings from the likes of Hilton Worldwide Holdings, Marriott International and other foreign chains.
The WSJ referred to boutique-style hotels' "distinctive lodgings, which emphasize food and beverages as well as architectural features rooted in local history and culture," as one of their main selling points.
One of these is Cachet Hospitality Group, a Shanghai-based company with hotels in Bangkok, Los Angeles and Mexico. Aware of the current supply glut in China, the group is eyeing to expand into Hangzhou, Wuhan, Kunming, Shaoxing and Chengdu.
Cachet's chief marking officer Yvonne Choi said that while hotel owners "are facing hard times" in China, there is still growth opportunity for lodgings that suit consumers' tastes.
"Chinese consumers have seen huge growth in purchasing power, they are in tune with entertainment trends and they want to stay in a place where they can brag to friends," Choi said in an interview with the WSJ.
She added that the company is going after well-travelled Chinese tourists who want an alternative lodging experience to what traditional upscale hotel chains offer. Cachet's hotels organize art shows and tea ceremonies.
Hotel profitability in China declined significantly between 2006 and 2009. It rebounded in 2010, with Shanghai leading the way through the World Expo held in that year, reported China Daily.
