A glut in Shanghai's hospitality market seems to have done little to dampen the enthusiasm of international hoteliers.
Accor, the largest hotel group in Europe and Asia-Pacific in terms of the number of hotels, is set to add four more hotels in Shanghai, taking its portfolio in the city to 14, while Chicago-based Hyatt Hotels yesterday signed deals to manage three hotels in the city, which will take its total to 11 in the next few years.
Analysts warned supply could outstrip demand rapidly, hurting hotels' performance.
Michael Issenberg, chairman and chief operating officer of Accor's Asia-Pacific business, said a world city like Shanghai had plenty of room to expand and that Accor would have a mixture of economy brands such as Ibis and five-star hotels under Sofitel and Pullman brands in the city.
'If we opened 300 hotels in Paris over 40 years, we can have an awful lot in Shanghai,' Issenberg said yesterday. 'China and India are the healthiest parts of the world', he said, referring to the risk of a double-dip recession in Europe and the United States. Accor's revenue per available room (revPAR), an indicator of profitability in the hotel business, had jumped 15 per cent on the mainland this year and was ahead of the group's Asia-Pacific average rise of 11 per cent, he said.
Meanwhile, Hyatt plans to launch three mid-market hotels away from Shanghai's city centre by 2015, the first of their kind in the region.