Will China's luxury market rebound to pre-slowdown levels? For Ritz-Carlton, it already has, according to company president Herve Humler.
In an interview with BBC published today, Humler asserts that “This is a temporary slowdown,” and remarkably, over "the last 60 days," the Ritz has seen "a new demand for the occupancy that we used to have prior to the slowdown about a year ago."
This news is especially noteworthy when you consider the fact that luxury hotels have been hit hard by both the economic slowdown and the government's anti-luxury austerity campaign. A Quartz article from this weekend reports that China's hotel revenue was down 16.7 percent from the previous year, which was likely heavily affected by a 40 percent drop in government meetings in hotels. Luxury hotels have had to drastically reduce their room prices in response. For example, Beijing's Chateau Lafitte Castle Hotel "now costs less than one at the Holiday Inn at Newark, New Jersey," according to the article.
It's possible that the Ritz-Carlton has employed a price-lowering strategy as well. From a quick scan of Ctrip.com, we can see that a room at the Pudong Ritz in Shanghai is going for RMB3183 (about US$520), while the Portman location in the city has a room available for only RMB966 (US$157).