Economic surge means more room for luxury
Shanghai
IF CHANGE IS good, then the luxury hotel industry in Shanghai will reap the benefits. Room rates are rising, more people are visiting, world-class events are increasing and the city's economy continues to lead China's surge.
Four- and five-star properties say occupancy rates have been steady this year, averaging 80 per cent or above. While that may indicate high-end hotels can accommodate travellers at short notice, do not count on it.
William Hall, chairman of International Branded Hotels Shanghai, said getting a room depended on the timing of the visit. The company represented more than 10,000 rooms.
'Shanghai is like any modern city,' said Mr Hall, who is also general manager of Equatorial Hotel Shanghai. 'There will always be peaks and troughs, based on what is happening. If you arrive during Formula One week, of course it's going to be more difficult to find a room if you haven't booked well in advance.'
Wong Wyeleng, the Westin Shanghai's director of marketing and communications, said demand for the top five-star hotels exceeded supply at times (March to May and September through November), forcing some visitors to seek accommodation at lower-rated hotels.
Meanwhile, insiders said the city's strong growth would absorb additional rooms without causing a glut. The Regent Shanghai, Crowne Plaza Pudong Shanghai and Radisson Hotel Shanghai New World opened this year. Pudong Shangri-La added 375 rooms with its Tower 2 extension. Another Shangri-La is scheduled to open in Jingan district in 2008.
Scheduled to open next year are Le Royal Meridien Shanghai, Four Points by Sheraton, Crowne Plaza opposite Fudan University, the Millennium Hongqiao and JIA Shanghai, a boutique hotel with 60 rooms.
Despite the additional rooms, prices have risen this year and will jump further next year. The average five-star rate was 1,495 yuan in April this year, representing year-on-year growth of 25 per cent, while the average four-star rate was 698 yuan, a
15.9 per cent rise over the same period, according to the Shanghai Municipal Tourism Administrative Commission.
Ralph Grippo, vice-president and area general manager of the Portman Ritz-Carlton Shanghai, said rates would rise at most upscale hotels.
'Luxury customers using five-star hotels are not affected by the price,' Mr Grippo said, pointing out that the Ritz-Carlton would raise rates next year to offset renovation costs and stay in line with market trends.
'If they want a luxury hotel experience, they are willing to pay for it. Room rates are still reasonable compared to other major international gateway cities such as Hong Kong, Tokyo, San Francisco, New York and London.'
