Chinese hotel owners are being forced to cut down room prices, as a glut of hotel rooms are left unoccupied because of overexpansion, according to Fitch Ratings, an international credit rating agency, The Wall Street Journal reported.

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Fitch's study shows that at least four in every 10 hotel rooms are sitting empty, pushing companies to slash down prices in a bid to attract more customers.

For instance, Liu Yiling, a homemaker from Beijing, said she paid only about 600 yuan ($90) for a premium hotel Sheraton in Changsha, noting that the same accommodation would have caused her 800 yuan ($119) in Shanghai.

Based on data released by STR Global, hotel revenue per available room, also called as RevPar, decreased by 0.7 percent in the first half of 2016 compared with the same period to that of in 2015.

In Changsha, there are nearly 10,000 hotel rooms, equivalent to 33 percent of the existing supply as of May, in the construction pipeline. Other cities including Hainan Island's Sanya and Chengdu also have huge construction projects coming up.

However, hotel room construction has seen a year-on-year decline since 2008. In fact, last year, while there are more than half a million hotel rooms under construction, the figure is down by 1.6 percent compared to 2014, the Lodging Econometrics reported.

According to The Wall Street Journal, the local government's focus on prestige has also fueled the rapid construction of hotels. City planners tend to require building an office tower, shopping mall, and branded hotel to increase the project's profile before residential lands are granted to developers.

"Traditionally people say China's hotel market is not doing well, it's one of the worst performing markets and it has tremendous oversupply, [but] I see it as different," Bernold O. Schroder, Pan Pacific CEO, said, noting the rapid increase of outbound tourists from China. "You have to look at the big picture."

Tagshotel rooms, room rates, Hotels, hotel business, china