Core Insights - The phenomenon of five-star hotels "practicing stall" is a self-rescue measure under various pressures, highlighting their importance as a configuration in major cities [4] - Xi'an has shown a counter-trend growth in the number of five-star hotels, establishing itself as the "second city in the north" [4][12] Group 1: Hotel Distribution and City Vitality - According to the Ministry of Culture and Tourism, Beijing and Shanghai lead in the number of five-star hotels with 61 and 56 respectively, while only five northern cities, including Xi'an, have more than ten [5] - The number of five-star hotels is a marker of city vitality, with high-end hotels typically found in economically developed or culturally rich areas [8][9] - Cities with strong economic power and vitality provide a sustainable environment for the development and operation of high-end hotels [9] Group 2: Xi'an's Hotel Landscape - Xi'an has over 40 five-star hotels, surpassing the official registration data, indicating a decline in the number of hotels applying for star ratings [13][16] - The decline in registered five-star hotels from 820 in 2020 to 736 in 2024 reflects a broader trend in the hotel industry, with the total number of star-rated hotels decreasing from 13,900 in 2010 to 7,716 by the end of 2024 [17] - Market demand has shifted towards hotel brands rather than star ratings, with global brands like Marriott and Hilton becoming synonymous with quality [18] Group 3: Transformation and Historical Context - The rise of five-star hotels in Xi'an can be traced back to the 1980s, with significant international hotel brands enhancing the city's tourism reception [19] - Notable hotel transformations include the Sofitel Legend People's Mansion and the Tang Hua Huayi Hotel, both recognized as significant architectural heritage sites [24] - The hotel industry in Xi'an is undergoing intense changes, with many hotels seeking to adapt through continuous operation, transformation, or upgrades [19][21] Group 4: Future Outlook - Despite the impact of the real estate market adjustment, Xi'an is attracting diverse investments, particularly from Shaanxi capital, indicating a potential for future growth in the five-star hotel sector [27]

Core Viewpoint - The five-star hotel industry in China is experiencing a significant decline, with many hotels facing closure or being sold at discounted prices due to various factors including changing consumer preferences and economic pressures [4][10][20]. Industry Overview - The rise of five-star hotels in China began in 1978 with the reform and opening-up policy, leading to a rapid increase in the number of hotels, particularly after the introduction of star rating standards in 1988 [6][9]. - The peak of five-star hotel numbers was reached in 2019, but the industry has since faced challenges, including the impact of the COVID-19 pandemic [9][10]. Market Dynamics - The introduction of new regulations in 2013 limited the use of five-star hotels for government meetings, leading to a decline in their prestige and a slowdown in new hotel openings [9]. - The number of five-star hotels has decreased significantly, with 171 hotels losing their five-star status between 2019 and 2024, particularly during the years 2021 to 2023 [10][12]. Financial Performance - The average revenue for five-star hotels in 2023 was 87.99 million yuan, a significant drop from over 100 million yuan in 2018, indicating a continued struggle for profitability [20]. - Some listed hotel companies reported declines in revenue and net profit compared to 2019, highlighting the financial difficulties faced by the industry [19][20]. Consumer Behavior - There is a noticeable shift in consumer preferences, with travelers increasingly opting for mid-range hotels that offer better value for money, leading to a decline in the proportion of consumers choosing five-star hotels [30][35]. - The average price of five-star hotels has decreased, with some brands experiencing significant drops in average daily rates compared to 2018 [18][20]. Competitive Landscape - New hotel brands and chains are gaining popularity, offering competitive pricing and modern amenities, which further challenges the traditional five-star hotel model [35]. - The rise of alternative accommodations and budget-friendly options has led to a decrease in the perceived value of five-star hotels among consumers [30][35].