SHANGRI-LA Asia has set its sights on China for expansion, with 17 hotel projects at the planning or development stage. Managing director Paul Bush said: 'We are already, by far, the biggest and most diverse five-star hotel group in China. 'We see enormous prospects in the major cities, certainly Beijing and Shanghai, and in the large number of secondary cities that have been under-served by five-star hotels. 'There is potential for the group to expand there and in many places there is potential for the development of complexes similar to our China World and Shanghai centres.' The group has a 50 per cent equity in the China World Trade Centre, situated on a 12-hectare site in central Beijing. The property includes two hotels - the China World and the four-star Traders - 448 serviced apartments, 60,000 square metres of offices, 16,300 sq m of commercial space and convention and exhibition areas. The Shanghai Centre, 30 per cent owned by Shangri-La Asia, includes the 628-room Portman Hotel, 472 serviced apartments, 25,000 sq m of offices and 7,600 sq m of commercial space. Other China hotel interests are the 51.3 per cent-owned Shangri-La Hotel, Shenzhen, and the Shangri-La, Beijing, in which Shangri-La Asia has a 49 per cent equity. Shangri-La Asia intended expanding its interest in four-star properties after the success of its Traders Hotel in Beijing, Mr Bush said. The group's China properties had been insulated from the negative affects of China's austerity drive by its reliance on business travellers from outside China, he said. Local guests from within China were a small factor overall, but the company saw it growing. 'At this stage, our China hotels primarily cater to the business sector,' he said. 'The only exceptions to that would be Hangzhou, at the famous West Lake, which is something of a resort hotel but, even that, has a large business clientele. 'Our new acquisition in Xian is mainly a tourist location at this stage but there is rising industrial interest there and we expect to pick up business travellers.' The group's break-even occupancy levels were generally lower in China than Hong Kong because of lower costs. 'We aim at about 60 to 65 per cent occupancy, although some individual hotels achieve better results. There are strong seasonal factors in both Hong Kong and China. October and November are traditionally high season,' he said. The group was enjoying 'excellent' room rates in Beijing and other parts of China, Mr Bush said. Achieved rates in general had risen strongly over the past two years. Shangri-La intends to further improve staffing by setting up a hotel management training centre.
