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Good times abruptly end at exclusive clubs
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Hangzhou’s luxurious clubs are feeling the pinch as the central government’s anti-extravagance campaign has forced dozens once reserved exclusively for the rich and powerful to close. Other clubs have been forced to change their business model and open to the masses.
The city government in January started to “seriously combat unhealthy practices in fancy clubs,” many of which are in historic buildings with great views and charge outrageous prices for membership.
Within a few months 56 high-end clubs set in scenic areas, parks, former residences of famous people and cultural ruins were shuttered. Thirty of them are around West Lake.
In January, two were transformed into a location for mass use. Earlier this month plans to transform another 16 upscale clubs around West Lake were approved by the city government.
“Each club will be transformed according to its location, features and background,” said Xiong Xiong, chief of publicity department of the Hangzhou Discipline Inspection.
The local government delegated the Heritage Study Center of Peking University to formulate a plan designed “to return West Lake, its scenery and its parks to the people.”
For example, Baoqing Villa, formerly a restaurant in a century-old villa, will be converted into a pavilion exhibiting paintings about Hangzhou. Bodhi Restaurant, in a house built in 1926, will become a mini museum showcasing the city’s history. Shanglin Garden, which once charged a minimum of 300 yuan (US$48.75) per person, will become a teahouse and academy giving public courses. Also, No. 9 Liuying will be converted into a wine culture salon open to the public.
The other clubs that were closed down will be transformed by the end of the year, according to the government.
Happy Teahouse has the distinction of being the first exclusive club to be transformed. It is in the middle of Lotus in the Breeze in the Crooked Courtyard Park and has been open to the masses since January.
Business is difficult
Formerly the exclusive West Lake Clubhouse, it was primarily used to serve members of Hangzhou Tower department store, which owns it. Each table at the clubhouse cost a reported minimum of 5,000 yuan.
Today, Happy Teahouse still boasts great lake views and expensive decor but serves Longjing tea starting at 18 yuan and dishes like scrambled eggs with tomatoes for 25 yuan.
But it is losing money because its rent remains high and menu prices are drastically cheaper than before. It has also had to deal with customers who buy one cup of tea and linger for hours, which limits how many people they can serve, and an unhappy staff.
The West Lake Scenic Area Administration Commission is responsible for renting out these former exclusive clubs. It says the venues are charged the same rents and taxation as before.
“The entrepreneurs have to figure out a way to stay in business,” said Liu Feng, deputy Party secretary of the West Lake Scenic Area Administration Commission, adding they have no intention of decreasing rents.
Some high-end restaurants, though not ordered to close, have also been affected by the campaign to rein in extravagance.
Emerald Club, which is along the Grand Canal, has voluntarily reduced prices. At the entrance is a sign showing pictures of common dishes and low prices, a stark contrast to the past when it had an electric cart to pick up distinguished guests.
It’s also losing money now because “the rent remains high and we invested a lot on the decor,” said a former shareholder. He said he sold his shares since the restaurant was losing money.
Two nearby restaurants that once catered to well-heeled diners have closed due to bad business.
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