Zibo's barbecue restaurants are full of customers on March 31, 2023. Photo: VCG

Zibo an increasingly popular city in East China's Shandong Province known for its Chinese style barbecue is seeking to curb spiraling hotels prices, as the cost of accommodation spikes ahead of the May Day holidays. 

The rise in hotel prices should not exceed 50 percent of normal prices, increases outside this range will lead to hotel operators being investigated and punished for price gouging, according to a newly-released notice jointly issued by the Zibo municipal development and reform commission and market supervision administration on Saturday. 

The regulations will be implemented starting from Sunday and will be removed after the May Day holiday ends. 

The actions of the Zibo government has received widespread praise online, benefiting from the "barbecue" buzz spreading across the country. The former industrial base in Shandong had rapidly become one of the hottest travel destinations in the country over the course of the last month. 

The reference price will be based on the actual transaction prices of hotels rooms from March 1 and 31, the notice read. Instances of price gouging will be investigated by the local market supervision department and will be referred to other relevant departments for further actions. Guilty parties will be risk of being publicly named and shamed. 

The move of Zibo in voluntary curbing hotel prices came after a budget hotel average room price skyrocketed to 1,000 yuan ($145) a night triggering a public backlash. 

The sudden popularity of the city tied to the sharp jump in prices led people to pause and think how a city formally known for its heavy industry can achieve long term sustainability as it rebrands itself.

The Zibo government reacted quickly to the public outcry by announcing the raft of new measures. The Zibo market supervision authorities quickly released a warning  to business operators. It reminded local businesses to be responsible and provide consumers with goods and services at reasonable prices.

Data published by several online travel platforms showed that less than 10 days before the May Day holiday,  tickets for domestic flights, hotels and scenic spots during the upcoming May Day holiday had already exceeded that of the same period in 2019. 

A report by travel agency Ctrip showed that travel packages for Zibo had risen by 441 percent compared to the 2019 May Day holiday period, while short term accommodation booking had jumped 12 fold, according to data from travel platform Tujia.