Plenty of room at the inn for the Canton Fair as economy bites

Concerns over poor advance hotel bookings in Guangzhou for the biggest trade fair in China has cast a shadow over waning demand for the country's exports.

But with the start of the fair less than one month away, the hotel industry is complaining of poor advance bookings. A sales manager of a Guangzhou hotel said the four-star hotel had struggled to attract bookings even after a significant price cut.

"Our standard deluxe rooms were fully booked during previous fair seasons even when they were priced at 1,800 yuan (HK$2,000) a night. But we have yet to secure satisfactory bookings this season with rooms now selling at 1,200 yuan per night," she said.

"Part of that is because the global economy has yet to pick up and the other factor is that China's upcoming 18th party congress is not making visa approvals any easier."

According to the sales manager, bookings were either cancelled or had yet to be confirmed under the tighter visa screenings for foreigners visiting during the period - which coincided with the once-in-a-decade leadership reshuffle in China.

"A group of our usual German guests are still waiting for their visas to be approved and they are not sure if they can get their visa on time, or at all," she said.

Some Guangzhou hotels have raised their room rates sharply over the fair period and are relying on perks to attract customers.

Rooms at Hanting Inns and Hotels are usually about 200 yuan per night, but prices are triple for the fair period and as a lure the hotel is offering loyalty points, double breakfasts, and a free shuttle service between the group's hotels and the exhibition areas on Guangzhou's Pazhou Island.

The five-star Royal Garden Hotel in Dongguan, which is a 90-minute shuttle-bus ride away from Pazhou, is charging 680 yuan a night and offering a fourth night free if guests pay for three nights.

"We are not putting up prices this year in the hope that we can attract more clients because of the sluggish market," a sales representative said.

Tina Bai, public relations manager of the Shangri-La Hotel in Pazhou, which is next door to the fair's exhibition venues, said bookings for the second phase of the fair were strong. Phase two of the fair focuses on housewares, gifts, and Christmas decorations.

Bai added that the hotel had anticipated the impact of a slowing global economy on bookings, and had taken action to secure reservations from loyal clients. Tariffs for standard to premium rooms at the five-star hotel are about 2,400 to 3,200 yuan during the fair period.

The twice-yearly Canton Fair started in 1957 and grew into the most well-established trade show on the mainland.

But in the past two years, orders placed at the show by overseas buyers have shrunk and contracts signed have been for the short term.

Deals signed during fairs held in April and May this year amounted to US$36.3 billion, down 4 per cent on deals secured at fairs held in October last year.