China’s Upscale Restaurants Feeling The Austerity Crunch
China’s austerity plan is starting to take a toll on fine dining.
Chinese Cuisine Association surveyed 100 restaurants and hotels across China to determine the economic impact of the government’s frugality policy, which includes banning luxurious bureaucratic banquets.
According to a report out this week, more than 60 percent of restaurants had cancelled reservations since the government’s austerity push started.
A Beijing five-star hotel had about 10 million yuan ($1.6 million) of cancelled reservations. Catering businesses in Tianjin took a hit, with a 30 percent drop this year compared to a year ago.
Market conditions are not likely to improve in 2013. According to the survey, 30 percent of the businesses believe industry growth will decline to less than 10%, while about 32 percent expect growth to be flat. Only 8 percent of the businesses, mostly among fast-food companies, expect growth of more than 15 percent.
In 2011, China’s food-service industry sales were 625 billion yuan ($99 billion), up 14% from 2010, based on data from market research firm Euromonitor International.
photo credit: crowne plaza beijing