By 4 p.m., a small crowd had gathered outside the five-star Grand Trustel Purple Mountain in Shanghai’s Lujiazui financial district, murmuring around boxes of packed meals as the faint smell of steamed buns lingered in the heat.

Staff moved quickly behind folding tables, stacking white plastic boxes as trays arrived from the kitchen. Inside, more boxes sat beneath chandeliers, lined neatly across the lobby floor.

A business lunch here still runs close to 300 yuan ($40) a person — well above the average restaurant meal. But for a few hours each afternoon, the same kitchen turns out what the hotel calls “street food,” aimed at customers who might never have stepped inside. Kelp salad goes for 10 yuan, sweet-and-sour ribs for 30, and a full kilogram of steaming crayfish for 88.

Many customers now come from far beyond the neighborhood, according to Liu, a sales manager at the hotel. “At first, we thought we’d mainly serve nearby residents and white-collar workers in the surrounding office buildings,” he said. “But to our surprise, people now come from all across the city.”

Across China, an increasing number of upscale hotel kitchens are making the same shift; same chefs, same equipment, just a business model pushed to the curb.

Hotels across Shanghai, as well as in the central Henan and eastern Zhejiang provinces, told Sixth Tone they set up stalls in response to a mix of pressures: fewer banquet bookings, tighter rules on official dining, slower business travel, and the growing cost of keeping kitchens idle.

Hoping to offset losses or simply stay visible, some hotels branded their stalls as “community canteens.” Others turned to livestreams and online orders to draw traffic. At Purple Mountain, most hot dishes are gone within an hour. In addition to on-site sales, the hotel manages six full WeChat groups for preorders, each capped at 500 members.

Zhu, a 75-year-old retiree in Shanghai, has visited the stall three times. “The prices are a little high, but I don’t mind — it’s not every day I visit,” he said. “Some dishes are hard to cook at home, and it saves me the trouble. Hotels lowering their profile and serving ordinary people is a kind of progress.”

Since June, stalls like these have surfaced outside hotels in more than 20 cities, drawing millions of views online, sparking arguments over what a five-star meal should be.

One early reason, according to sales manager Liu, was the heat. “The idea was to make life easier for nearby communities and office workers during these sweltering days, so they didn’t have to cook at home,” he said.

But the real driver, many hotels say, was mounting financial pressure.

In Henan’s Yanling County, the budget Jinyue Fashion Hotel was one of the first in the area to set up outdoor food stalls this summer. “Right now, stalls are trending across the country,” said Kang Zheng, the hotel’s general manager. “We followed the trend so people could discover our hotel, and try our food.”

To draw attention, Kang’s team began livestreaming the stalls each day on Douyin, China’s version of TikTok, showing off dishes, prices, and the bustle around the tables. Some posts drew more than triple the likes of their usual content — until they got too busy to keep filming.

Hotels like his once relied on state-owned clients for meetings, catering, and overnight stays. But after new rules took effect in May — restricting official banquets and banning alcohol at receptions — those bookings largely disappeared. The policy was part of a broader effort to curb official drinking and formalism. “We used to work with public institutions,” Kang said. “Now, they don’t dine out at all.”

Kang asserted that the street stalls were never about profit but just staying open. “Since the new rules, some restaurants have shut down entirely, while others have laid off staff. We wanted to avoid that.”

Now, nearly every evening at 5 p.m., about eight staff members — most from the hotel’s management team — stand behind folding tables to serve food. Summer is typically the off-season, Kang added, with both meetings and tourism falling off in the heat. Still, most dishes are gone within the hour.

At a five-star hotel in Hangzhou, Yao, an administrative director, concurs. At her Zhejiang Grand Hotel, bookings for corporate events, weddings, and conferences have fallen sharply. “If a meeting can be canceled, it will be,” she said, requesting to be identified only by her surname.

While their stalls were launched in June, she believes the drop in bookings began well before this summer. Official data show that in June, revenue growth in the hospitality sector plunged from 5.9% to just 0.9% — the lowest level in nearly two years — before edging up slightly to 1.1% in July, according to the National Bureau of Statistics.

As revenues shrink, competition has only intensified, and a price war that once limited to standalone restaurants has now reached hotel kitchens.

At Kang’s hotel in Henan, a 398-yuan set meal was quickly undercut by rivals offering similar packages for 358 — then 298 yuan. “Now everyone’s on the street,” he said, “selling even cheaper takeaway.”

But whether that game is worth playing remains unclear. Kang said daily revenue from the stalls averages 8,000 to 10,000 yuan — but profit rarely exceeds 2,000.

At the Zhejiang Grand Hotel, takeaway revenue has reached 30,000 yuan a day. Yet, after accounting for staff and overhead, it still runs at a loss. “It’s popular,” said Yao, the manager, “but it doesn’t make money.”

Still, some hoteliers are betting that foot traffic now will translate into longer-term gains.

At Zhejiang Grand, Yao sees the stalls as a way to build visibility, and possibly launch new offerings like handmade baozi (steamed buns) or seasonal mooncakes once the outdoor service is phased out. “We believe that word-of-mouth will spread through this model,” she said. “More people will know about us, which will ultimately benefit other parts of our business.”

Others see the shift as a step too far. Ren Feng, who runs five high-end hotels in Hangzhou where private rooms can cost up to 1,000 yuan per person, said that even after closing two properties and losing more than half his revenue, he refused to set up stalls.

“Outdoor stalls can only solve very limited problems,” he told domestic media. “We will never do it.” Instead, his hotels are focusing on niche banquet experiences — lotus-themed feasts, for example — and running short-video channels to promote their brand without lowering its profile.

Even among those who’ve embraced the model, concerns remain. According to Yao, the stalls inevitably lower a hotel’s status. “In-house guests may find the scene messy,” she said, “but it has pros and cons.”

She added: “We’ll keep doing it as long as there’s demand. But once the weather cools, people may prefer to cook at home again, and business will naturally shrink.”

At Kang’s hotel in Henan, the stalls still opened most evenings at five, often selling out within the hour through July. But by August, the focus had already shifted to graduation banquets, weddings, and class reunions, with outdoor sales paused during busier periods.

For Kang, the measure of success is simpler than revenue: “It was to keep everyone working. No layoffs, no pay cuts, no forced leave.”

Editor: Apurva.

(Header image: Chefs from a five-star hotel sell food prepared in its kitchen at food stalls in Zhengzhou, Henan province, July 10, 2025. VCG)