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Denise Tsang

Competition in Shanghai's high-end hospitality sector is heating up, with at least two international players entering the market shortly before the curtain falls on the World Expo at the end of October.
Langham Hotels International, owned by one of Hong Kong's largest property developers, Great Eagle Holdings,  is to open the doors of The Langham  in Xintiandi  -  a prime dining and entertainment precinct in Shanghai - on October 1. 
The 380-room hotel will compete for custom with the 270-room Fairmont Peace Hotel, a 102-year-old hotel on the Bund  that reopened last week after a three-year face-lift.
Langham Hotels International chief executive Brett Butcher  said The Langham would be the group's anchor project  on the mainland. It  is its third hotel in Shanghai and  will be followed by two new hotels in Beijing and  two in Guangzhou.
'The Xintiandi hotel will be a strategic flagship, which will serve as a foundation for us to continue to expand into other primary and secondary cities,'  he said.  
'It will become the first major hotel in Xintiandi.'
He  said discussions were under way to  develop new hotels in Chengdu, Sichuan; Ningbo, Zhejiang; and Shenyang and Dalian in Liaoning.
Langham Hotels International recently paid US$73 million for the one-third of the Xintiandi hotel it bought from the Lo family, which controls Shui On Land, the developer of the Xintiandi district.
Butcher did not say how much The Langham would charge but said it would consider the Fairmont Peace Hotel as one of its competitors. 
The Fairmont Peace Hotel charges at least 2,990 yuan (HK$3,428) per room per night, including service charge.    
Some analysts said the two newcomers were entering a punishing sector,  as the growth in supply  of tourist beds in Shanghai  had exceeded  demand growth over recent years. The global financial crisis meant fewer corporate travellers visited the mainland last year.
Undaunted, Butcher said the number of hotel rooms in Shanghai,  about 50,000, was about half of the total of 93,000 in New York. 
He pointed out that mainland  residents clocked up 1.3 billion trips  within  the country last year,  a figure that had grown  10 per cent annually in the past few years.
 Lily Ng, a Shanghai-based executive vice-president of hotel consultancy  Jones Lang LaSalle Hotels, said the new supply of international hotel rooms in Shanghai would hit a peak this year, at 10,654 rooms,  about double the 5,278 rooms  last year. 
Ng expects the total number of internationally branded hotel rooms  to jump to 32,045 by the end of this year but growth in new supply  to taper off  to 3,647 rooms next year and to 3,161 rooms in 2012.
However, she believes Shanghai hotels will continue to recover from last year's doldrums.
'The May performance improved significantly from last year,' she said. 'This trend will continue until the end of the year.'
In the first five months of this year, revenue per available room - the benchmark for the profitability of hotel rooms - of Shanghai's five-star hotels soared  53.4 per cent to 845 yuan, Jones Lang LaSalle said. 
That was on the back of a 9.4 per cent rise in the average room rate to 1,340 yuan per night and an 18.2 percentage point increase in average occupancy to 63.1 per cent, it said.



Langham takes on top end of Shanghai hotel market