Why China’s high-end hotels are now setting up food stalls outside

Next to the man, who is the hotel’s general manager, chefs in tall, white hats carved up roast ducks – 35 yuan for half and 60 yuan for a whole – for the streams of bargain-hunting customers.

The bustling scene outside the five-star Noble International Hotel, which has gone viral on Chinese social media, stood in sharp contrast to the subdued atmosphere inside the premises.

Although it was nearing dinnertime, the in-house restaurant offering an all-you-can-eat buffet for 258 yuan drew barely a handful of diners. In the marble-floored lobby, most of the people there were either seeking respite from the heat outside or digging into their takeaway meals.

Across China, from Hangzhou to Changsha, more high-end domestic hotels are swopping chandeliers for street lamps, setting up food stalls outside their doors to sell hotel-made dishes at bargain prices as their dining rooms sit empty.

These makeshift set-ups are a stark reflection of an industry under pressure, as consumers tighten their belts, demand for wedding banquets shrinks and a surge in new hotel openings outpaces the recovery in travel and dining.

An economic slowdown, a tight job market, high youth unemployment and a prolonged property slump have led many Chinese to cut back on their spending. Furthermore, an aging population and a growing reluctance among young adults to marry have driven wedding numbers down.

In a fresh blow to the high-end hotel sector, which generates revenue partially from corporate functions and business banquets, Chinese authorities in May 2025 renewed a sweeping push for frugality, urging officials and state-owned firms to rein in extravagance and hospitality spending.

Such hotel-operated food stalls are merely the latest stopgap measure to “ride it out through these low months”, said Mr Sun Bo, general manager of Shaoxing International Hotel, a five-star hotel in eastern Zhejiang province. His hotel was one of the earliest to set up a food stall outside its premises in mid-June.

Mr Sun told The Straits Times that he knows relying on food stall revenue is not sustainable in the long term, as the “profit margin is very, very low” since the hotel uses the same quality ingredients as its in-house restaurants.

“These few months, since our chefs and staff are free, we might as well drop our profit margin for the time being and let more people get to know our hotel and try our dishes, and drum up some marketing,” he said.

To cope, some struggling hotels, such as Banyan Tree in Chongqing, are selling off their assets. In Shenzhen, the DoubleTree by Hilton launched a 79 yuan “leftover blind box”, repackaging unsold buffet items that would normally cost more than 200 yuan.

Zhengzhou’s Noble International Hotel’s general manager, Mr Lei Yuming, spoke to Chinese local media about concerns that operating a street stall might be considered unbefitting for a five-star hotel. To that, he said: “We don’t think there’s anything wrong with a five-star hotel doing this… Honestly, how much is ‘face’ worth?”

When ST visited on July 9, Mr Lei declined to be interviewed, saying that he was not authorized to speak to foreign media.

Mr Guo Xiaobao, manager of a Chinese liquor Maotai retail store on the ground floor of the hotel, said he was initially skeptical of the hotel’s food stall idea but quickly understood why it was necessary, having seen the hotel’s business decline first-hand and his sales suffering due to the reduced footfall.

“To put it bluntly, if you can’t survive, what ‘face’ is there to save,” he said. “If the hotel doesn’t adapt, it will lose both its ‘face’ and employees.”

Mr Tao Zhou, managing director and head of hotels and hospitality group at JLL Greater China, told ST that high-end hotels are now under increasing pressure to cater to a more value-conscious market in an era of “consumption downgrade”.

“Social trends such as fewer weddings and tighter corporate travel and dining budgets have eroded some of the traditional revenue pillars that many full-service hotels once depended on,” he said.

Mr Zhou said the recent push for frugality and fewer formal banquets is more of a “wake-up call” than a death knell.

“This presents high-end hotels with an opportunity to diversify away from banquet-heavy models and focus more on flexible, true market-driven and guest-centric offerings,” he said.

In the third quarter of 2024, five-star hotels across China averaged just 60.7 percent occupancy, leaving nearly 40 per cent of rooms empty. Overall revenue dropped 9.3 percent year on year to 16.95 billion yuan, with food and beverage revenue falling 14.6 per cent, according to data from the Ministry of Culture and Tourism. There are no publicly available statistics for more recent quarters.

By the end of 2024, China had around 370,000 hotels, with 18.5 million rooms, up nearly 30,000 hotels compared with the five-year period before the Covid-19 pandemic, according to an April 2025 report by China Report Hall, a Beijing-based market research institute.

Yet, domestic travel in 2024 remained 6.5 percent below pre-pandemic 2019 levels and inbound tourism lagged by 2.8 per cent. The imbalance in supply and demand has led to a broad industry slump, with high-end hotels now stuck in a price war.

Ms MingYii Lai, a strategy consultant at Shanghai-based market research firm Daxue Consulting, said the rise of the food stall phenomenon among high-end hotels is just as much about creative marketing as it is about a revenue lifeline.

Hotels and restaurants can leverage existing supply chains and repurpose banquet ingredients for street food to offset losses from low banquet demand, said Ms Lai.

“Intermittent pop-ups from high-end hotels lower entry barriers for Gen Z and the aspiring middle class while maintaining luxury appeal,” she added, referring to the generation born in the mid-1990s to the early 2010s.

An example is how The St Regis in Shanghai transformed its food truck into a permanent daytime mobile bar parked next to its cafe to attract the younger, more trendy crowd, she said.

Amid the bustle at Zhengzhou’s Noble International Hotel’s food stall, a chef from a nearby restaurant stood quietly watching.

Mr Liu Yang, 29, said his bosses had shown him the viral clips on Douyin, the Chinese version of TikTok, and wanted to see the fuss for himself.

“I can understand why they are doing this, even though they are a five-star hotel,” said Mr Liu, who works in Jiu Jiu Yuan, which specializes in wedding banquets. “In this economic downturn, surviving is more important than ‘face’.”

“Our business has also been hit badly. Before the pandemic, our turnover was several million yuan a month. Now, it’s about half that. I’ve been cooking far less,” he said.

First in line at Noble International Hotel’s food stall was Ms Chang Yan, 38, a Zhengzhou native, who started queueing at 3pm even though the stall officially opens at around 5pm.

“The macro environment is tough, but the hotel found a way to connect with ordinary people while earning some income, which I think is a good thing,” said the hotpot ingredient supplier and content creator.

Ms Lu Lu, a 35-year-old homemaker, said the draw is the five-star quality food at low prices. “Locals like us won’t step foot into a five-star hotel like this, much less eat its food. Now that they have made it accessible, what’s not to like?” she said.

By 7pm, two hours after the stall opened, the crowd-favorite xiao long xia – the hotel prepared 250kg that day, a kitchen staff member told ST – was sold out, and other dishes were running low.

Some of those still in line who were turned away grumbled that they had queued up for nothing, while others loudly asked what time they should come back the next day.

Mr Liu, the chef from the nearby restaurant who had been quietly observing, said: “I’m going to report to my bosses my findings today. This is quite interesting, and I think we can emulate this food stall set-up to help improve our revenue.”

The Straits Times/Asia News Network /