With China's imminent entry into the World Trade Organization and the Asia Pacific Economic Co-operation Summit to be held in Shanghai next year, local hotels are likely to see an increasing demand for four- and five-star hotel rooms.
Due to the increasing amount of international and domestic businesses being set up in China, top local hotels are witnessing an occupancy rate increase, with most managing more than 70 per cent on a regular basis.
Business is so good that many top hotels are considering raising room rates by 10-15 per cent next year.
"Shanghai is worth that," said Richard M. Hodges, general manager of Regal International East Asia Hotel.
The city now has a dozen five-star hotels, 15 four stars and dozens of other top-rated hotels.
For the past year, five-star hotels have been offering four-star room rates and four-star hotels have been offering three-star hotel room rates.
Thanks to economic prosperity on both the domestic and global stages, the hospitality industry is experiencing a rebirth.
Hodges' plan has been echoed by most of the top hotels in Shanghai, such as Purple Mountain, Yangtze New World and Pudong Shangri-La.
International hotel groups are making further inroads into Shanghai. In one and a half year's time, Marriott will open two more hotels -- one a courtyard style hotel in Pudong, the other a JW Marriott near the Shanghai Grand Theatre.
To cope better with the changing market and stay competitive, several hotels, such as Yangtze New World and Purple Mountain, are undertaking large-scale renovation projects.
Making the Shanghai hotel situation even more complicated are the subtle changes in names and management that have taken place recently.
The five-star New Asia Tomson Hotel has been made into an Inter-continental, the top offering from BASS International, which also owns or manages Crowne Plaza Shanghai, Holiday Inn Downtown Shanghai and Holiday Inn Pudong Shanghai. There are also rumours that the Yangtze New World Hotel will be renamed Renaissance, to suit parent company Marriott.
The hotel business was the first sector of the Chinese tourism industry to be opened to foreign investment, and international hotel groups have been flooding Shanghai since the early 1980s.
"We welcome international hotel groups to Shanghai," said Dao Shuming, vice-chairman and Party secretary of the Shanghai Municipal Tourism Administrative Commission.
"Chinese hoteliers can learn a lot from their international counterparts," he added.
Dao's opinion is shared by Dong Jianzhen, general manager of the Chinese-run five-star Hua Ting Hotel & Towers. "Exchanges with and exposure to international hotel management helps us grow stronger," Dong said.
As more hotels arrive, the competition will naturally become more intense. It is a better situation for buyers than for the industry, but local hotels have said they are optimistic about their future of the market.
(China Daily 10/24/2000)
