Hotel industry revenues slow along with govt demand

China's hotel industry saw its overall revenues drop by 16.43 percent year-on-year between January and April 2013, dragged down by the decreasing number of government meetings, the China Business News reported Monday, citing data released by the China Hotel Association (CHA).

According to the association, government meetings accounted for only 13 percent of all meetings in the first four months of 2013, down 37.94 percent from the same period a year earlier.

The revenue decline is mainly attributed to government restrictions on the "three public consumptions" - overseas travel, receptions and official cars - as well as a depressed consumer market in the hotel industry, the report quoted Han Ming, CHA president, as saying.

Han noted that an increase in the costs of labor, property, raw materials and energy also led to a decline in the hotel industry's profits.

However, data from the CHA showed that revenue from wedding receptions rose by 9.48 percent in spite of the revenue decline from meetings, indicating that hotels and restaurants have expanded their focus on wedding receptions and other kinds of banquets.

Providing low-cost services is another strategy that high-end hotels and restaurants have used in response to their revenue decline, the news report said.

China's campaign to prohibit officials and military officers from extravagance has affected not only the hotel industry, but the high-end liquor market as well.

Media reported that the price of high-end liquor has dropped by hundreds of yuan per bottle due to the government's policy.

Moutai, China's leading liquor brand, saw a sales volume decrease of 23.8 percent year-on-year from January to April of 2013, and Moutai's rival Wuliangye posted a slower-than-expected revenue increase in its first-quarter fiscal report for 2013, news portal chinanews.com report Thursday.