Shanghai banker Jason Zhang no longer stays at the Westin in Beijing’s financial district after his company cut its travel budget. Instead, he now chooses a more affordable domestic hotel chain.
Surprisingly, the lower price hasn’t meant a lower-quality experience. While the breakfast buffet is smaller, Zhang enjoys the local dishes at Atour, a domestic chain. The pillows and comforters are so popular that many guests buy them after checkout. Plus, guests can check out as late as 6 p.m., avoiding the usual morning rush.
Zhang’s experience reflects a wider trend. Since last year, Chinese banks have cut back travel perks, banning business-class flights and expensive hotel bookings. As China’s economy slows, companies are spending less on travel.
This shift is challenging luxury international hotel brands. However, it’s creating opportunities for smaller local chains that cater to business travelers’ needs.
Although work-related travel spending in China slowed in 2024, it still hit a record US$372.5 billion, according to market researcher China Trading Desk. Most of the growth now goes to modest hotels rather than luxury ones. Consultants predict mid-range local brands could grow their market share from 45% in 2023 to 75% by 2028.
