Why Luxurious Five Star Hotels In China Are Deliberately Making Themselves Crappier

Why would a five-star hotel want to make itself a less luxurious and more crappy? That's the questions observers asked themselves this week after Chen Miaolin, vice president of the China Tourism Association, was quoted by Xinhua news agency as saying that 56 five-star hotels had pledged to to downgrade themselves to a four-star rating last year.

"I've been in the business for decades and I've never seen this before," Chen reportedly told the Chinese publication. The comments were apparently so shocking that the Wall Street Journal called to confirm he actually said it.

While hotels generally strive to be as nice as they possibly can, the situation in China has changed over the last year due to President Xi Jinping's recent anti-corruption drive. "In the past, hotels and restaurants competed for stars, to be high-level, but now they compete on who is more low-profile," said He Jiahong, an anti-corruption expert at Renmin University, told the Guardian.

"The series of anti-corruption measures in 2013 was quite strong, compared to the past, although it has still not fixed the problems in the system," He said. "The decline in the hotel and restaurant business shows that in our country, the luxury hotel business, or high-grade consumption in this area, is supported by government spending."

The decision to remove stars has been made not only for financial reasons - operating revenue amongst 4,000 star-rated hotels in China had dropped 25% over the last year, Chen noted - but it may also show a shifting conception of luxury: New hotels are delaying their applications for five-star status, the Financial Times notes, hoping to avoid the stigma currently surrounding luxury products.