China's bankers ditch global hotel chains as travel budgets bite
Instead, he had to settle for a cheaper domestic hotel chain.
To his surprise, the discount in room rate did not lead to a discount in experience. Yes, the expansive breakfast buffet is gone, but Zhang relishes the local dishes served at the domestic chain Atour. Its pillows and comforters are so popular that many guests buy them after checking out. There's no scramble to pack and leave in the morning as checkout can wait until 6pm.
Zhang is not alone in switching hotels. Chinese banks have scaled back travel perks since last year, barring staff from flying business class and booking pricey hotels, as China's economy slows and companies tighten their purse strings. And while it is making things tough for the top-end international brands, the greater financial prudence has opened up opportunities for smaller local chains that focus on the needs of business travellers.
While spending on work-related travel in China slowed in 2024, it still grew to a record US$372.5 billion, according to market researcher China Trading Desk. But much of the growth is being captured by hotels offering modest accommodation rather than the luxury end of the spectrum. Mid-range local brands could expand their market share to 75 per cent by 2028 from 45 per cent in 2023, the consultancy says.
That is giving domestic chains a boost. Atour Lifestyle Holdings posted record revenue growth of 55.3 per cent to 7.25 billion yuan (US$1 billion), thanks in part to sales of its pillows and comforters. Another hotel chain, H World Group, saw revenue jump almost 10% year-on-year.
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