Ain't capitalism a bitch?

BusinessWeek has an article about the problem with all the vacancies generated because of the hotel-building boom in Beijing; seems the expected flood of visitors didn't show up:

Last year, management of the Red Hotel Beijing took over a drab Stalinist-era style hotel on the eastern side of Beijing and decided to give the old place a facelift. Located one block north of the stadium and arena scheduled to host the Olympic soccer and boxing matches, the hotel had a location that seemed a sure moneymaker for the Beijing games. So the Red Hotel invested $1.5 million to nearly double the number of rooms to 75, add a fresh coat of brick-red paint to the facade, and install wireless Internet access. Eager to recoup its investment, management—in the days before the opening ceremony on Aug. 8—started charging room rates of $262 a night, a sixfold increase over the old rates. Even with such big price increases, management figured they could fill at least 70% of their rooms with tourists during the Games.
They were wrong. "We are not getting as many guests during this Olympic period as everyone expected," says Mary Ma, sales and marketing department manager of the Red Hotel Beijing. "Maybe it is because more hotels have opened; maybe it's because hotels have greatly increased their room rates." The hotel has since cut average room rates to $130. That's still triple the normal rate. And the change may be too little, too late. With the Games under way, the Red Hotel's occupancy rate is still an anemic 50%.
Seven years ago, when Beijing won the rights to host the Olympics, hoteliers expected a flood of tourists to arrive in the Chinese capital in 2008 and invested accordingly. But the Olympics have not turned out to be a cash cow for hotels. Most, if not all, of Beijing's hotels are hosting fewer visitors than they originally expected.
During the Olympic period so far, only 77% of Beijing's 22,300 five-star hotel rooms and 45% of the 34,500 four-star hotel rooms are filled, according to the Beijing tourism bureau. More than 60% of rooms in Beijing three-star or lower hotels are currently empty.
Beijing's hotels also are suffering as increased security makes it more difficult for outside tourists to visit the city. In the first seven months of the year, Beijing received 9% fewer tourists than the same period last year. Hoteliers are blaming China's tighter visa policy enacted in May for the drop in tourists during the Olympics. Beijing tourism officials blame the drop in tourists on terrorist attacks, riots in Tibet, protests marring the Olympic torch relay, as well as the earthquake in Sichuan.

Rico says he can't imagine what a 'three-star or lower' hotel in Beijing would be like, but he's glad he's not staying in one. As for those other reasons, Rico guesses the Chinese have only themselves to blame, except for the earthquake of course...