Shangri-La deluxe hotel opens in Guangzhou

Luxury sector competition beginning to heat up

Shangri-La Asia is scheduled to open its US$145 million hotel in Guangzhou today - the city's first newly built international five-star hotel since 1983 - raising the curtain on a battle for the custom of a rapidly growing number of travellers.

The opening of the 704-room deluxe hotel on Haizhu island overlooking the Pearl River will be followed by that of four other hotels of the same grade this year - a Grand Hyatt hotel, a Ritz-Carlton, a Westin and a Sofitel.

The number of new kids on the block shows no sign of abating, with a Sheraton hotel scheduled to receive its first guest next year and a W Hotel and a Mandarin Oriental hotel set to join the competition for high-end customers in 2010.

Some analysts have warned about the danger of too much new supply, but Guangzhou officials want to raise the existing number of five-star hotels, both domestic and international, to 15 by the 2010 Asian Games.

'There has been no supply of top-tier hotels of an international standard for so long that demand is stagnant, or the other way round,' UBS analyst Eric Wong said. 'But the sector will not be the same in the years to come as the robust economic growth in the Pearl River Delta region will spur travellers to stay in Guangzhou.'