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Skyrocketing hotel prices scare off tourists

Feb 25, 2010

Skyrocketing hotel rates in Hainan province during the Spring Festival holiday scared away tourists and tainted Hainan's image as "China's Hawaii", travel experts said.

Hainan, China's tropical southern island, attracted a record number of tourists seeking leisure or investment opportunities during the Spring Festival holiday. But hotels in Sanya, a city in Hainan, only had a 60 percent occupancy rate, down from 90 percent in previous years, travel experts said.

The province faced criticism from the media and the public for unreasonably high hotel rates and exorbitant charges for services.

The hotel rates in Hainan soared to an unbelievable level during the festival. For example, prices for a room at the Hilton Sanya Resort during the festival started at 11,138 yuan a night.

For some, the hiked prices did not bring any improvement in service.

Fang Hua, who traveled in his car from Guangzhou, Guangdong province, to Hainan last week, said he was disappointed with the poor service.

The no-star hotel he stayed at charged 1,500 yuan for a standard room per night during the festival, up from the usual 200 yuan.

Moreover, when Fang asked the hotel to fix problems in his room - no hot water and blocked plumbing - the hotel did not do anything and also refused to give him another room, because the hotel was full.

"The rate is that of a five-star hotel, but the service is that of a one-star hotel. How can it expect customers to return?" he asked.

The hike in hotel rates is bigger than in the past. Insiders said hotels and travel agencies had high expectations for the travel market during this year's Spring Festival, as not only tourists but also potential investors who think highly of Hainan's real estate market were planning to visit the island during the holiday.

The island secured the central government's support at the end of last year to develop it into a top international tourist destination by 2020.

According to the latest official statistics, at least 1.06 million tourists from home and abroad visited the island between Feb 13 and 19, up 18 percent year on year. The province yielded 2.8 billion yuan ($410 million) of tourist revenue in the week, up 62 percent.

Media reports said local tour agencies had booked thousands of hotel rooms and hoped to sell them to tourists at a premium.

But the unusually high price eventually scared away many budget-conscious tourists, who instead camped on public beaches or turned to cheaper family hotels.

Liu Qin, from Lishui, Zhejiang province, who stayed at a family hotel with her husband, said the camping idea is brilliant and romantic.

"Next time, I will bring a tent and camp under the coconut trees," she said., a leading travel website, said in a press release yesterday that the average hotel room occupancy rate in Sanya was estimated at only 60 percent during the Spring Festival holiday.

"In the past, occupancy rates for the Spring Festival holidays were more than 90 percent. But this year, the occupancy rate at high-end hotels in Sanya slumped by 15 to 20 percent on average," said Xiao Baojun, who is in charge of Hainan Kang-Tai International Travel Service Co Ltd.

Those who scalped hotel rooms suffered huge losses. Haikou Civil Holiday, a local large travel service, booked at least 1,000 hotel rooms in Sanya. But more than 200 rooms remained vacant during the holiday, incurring a loss of 1.5 million yuan, said General Manager Jiang Yueqin.

"It (the unusual price hike in the holiday) reflects an immature market. It is near-sighted, and will eventually harm the tourist industry of Hainan," said Dai Guofu, deputy chairman of Hainan Association of Tourist Attractions.

Wang Yiwu, a professor with Hainan University, suggested the industry association should make a full investigation of market demand and give guidance to the hotels.

"Hainan has unique natural resources in China, but at a time when going abroad is convenient, Hainan is no longer the only choice. For the same money, many people choose to travel abroad," he said.

On Sunday, hotel rates in Hainan returned to their normal level.

A 22,300-yuan-per-night suite at one hotel during the festival dropped to the normal price of only 3,050 yuan, according to, a leading online travel service.

On average, the booking price for a standard room at a five-star hotel in Sanya dropped to 1,300 yuan this week, which is only one-tenth of the rate during the festival, it said.

Skyrocketing hotel prices scare off tourists
Hainan / Image via


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