Banquet divisions in some luxury hotels are looking for new clients because of a sharp drop in bookings ahead of Spring Festival, the peak season for the industry.
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The fall in bookings follows moves announced by the central government last month to combat extravagance and corruption.
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"All banquet bookings at our hotel have been canceled," said a staff member from the banquet division at the Beijing Friendship Hotel, a hotel designated for government conferences.
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He said the hotel catered for at least two or three banquets a week during peak season in the past, but the number has fallen to zero this year.
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Clients - mainly government departments and State-owned enterprises - canceled their bookings in response to the new government regulations. It had been tradition for government departments to hold annual "greeting meetings" in high-end hotels before Spring Festival.
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The Beijing Friendship Hotel spokesman said: "The cancellations are too sudden and we do not have a way to make up the losses yet. My team is trying its best to look for other clients."
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A five-star hotel in Hangzhou, Zhejiang province, said it received 10 banquet cancellations before Spring Festival, as a result of the new regulations, and many clients had also decided to cut back on greetings events for the holiday.
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"The loss is sizable," the hotel's manager, who declined to be identified, told China Daily.
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However, although hotels have been hit hard, some business insiders have welcomed the changes.
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"Business is not as good as last year definitely, but it means the industry is going back to a real commercial business," said Song Guojing, general manager of Beijing Hot Spring Leisure City, a hot spring resort.Â