During the peak summer travel season in China, many bed and breakfasts in Dali are facing a paradox of low occupancy rates despite it being the peak season. Some bed and breakfasts are even offering rooms for as low as 50 Chinese yuan per day in an attempt to attract customers. However, the overall occupancy rate is only about 50%, a significant drop from the usual 80% seen in previous years. This issue made headlines on July 13, catching the attention of many.
According to various media sources such as Sina’s Travel Guide, summer is typically a peak travel season in mainland China, with bed and breakfasts in Dali usually achieving over 80% occupancy rates. While the regular price for a room is over 200 yuan per night, it usually increases to over 500 yuan during the summer holiday season. However, this year, bed and breakfast owners are reporting poor business performance with less than 50% occupancy rates. Some owners have mentioned that despite receiving about 100 inquiries on social media daily, only 1-2 bookings are being converted from those inquiries.
To attract customers, many bed and breakfasts have resorted to offering low-cost services. In Dali’s ancient city, some bed and breakfasts are offering basic double rooms without air conditioning but including breakfast for as low as 50 yuan per night. This price point has stirred discussions as it is barely enough to buy a premium cup of hand-drip coffee, and in the surrounding restaurants of the ancient city, 50 yuan may only cover a single ordinary dish, highlighting the stark contrast between living costs and accommodation prices. These budget accommodations are mostly located outside the core area of the ancient city, featuring small room sizes, basic amenities, and lack of en-suite bathrooms.
The root cause of this situation lies in the imbalance between supply and demand, with an oversupply of bed and breakfast establishments and insufficient guests. According to the “China News Weekly,” from 2021 to 2025, the number of bed and breakfasts has increased by approximately 2.5 times, while the growth rate of tourists during the same period is only around 40%, resulting in a supply increase almost four times greater than the increase in visitors. By the end of 2025, Dali as a whole had 7,007 operational bed and breakfasts with a total of 68,300 rooms and 103,200 beds.
Furthermore, during the summer, prices at the same bed and breakfasts often skyrocket several times over, with popular ones charging two to three times their usual rates. Visitors are becoming more price-conscious, leading to extensive inquiries solely to find lower prices.
Additionally, over 95% of bed and breakfasts share a similar style lacking distinct characteristics, causing visitor fatigue with the aesthetics and forcing bed and breakfasts to compete by lowering prices to attract limited customers.
With the decline in visitors and intensified price competition, bed and breakfasts are experiencing regular losses. Some bed and breakfast owners have revealed that despite investing nearly 2 million yuan into their properties, they only managed to recoup 800,000 yuan upon sale. Another example is a post-90s entrepreneur who invested over 1 million yuan, sustained the business for over two years, but could only find a buyer offering slightly over 600,000 yuan when looking to sell.
Sina’s Travel Guide predicts that the price war among Dali’s bed and breakfasts will persist in the long term. However, the price war is not expected to continue indefinitely. Nevertheless, in the short term, there are no signs of relief until the industry undergoes consolidation and restructuring.