Grand Pacific Suites Shanghai, a luxury hotel located on the heart of Shanghai, closed its doors temporarily this week due to issues managers say are "out of their control."

Other hotel sources, however, say the hotel is facing problems with private investors.

The hotel, which is located on Shaanxi Road N. behind CITIC Square and only opened last fall, informed its guests earlier this week that they had to vacate their rooms by Wednesday.

"It is with regret that I am writing to inform you that an unforeseen situation regarding building issues has arisen at the hotel that requires us to unfortunately vacate the building during its resolution from June 29, 2005," hotel General Manager Geoff Howe wrote in a letter to guests.

The letter did not state the specific reasons for closing the hotel or say when it would reopen.

"It was problems with the air-conditioning systems at the hotel that forced us to stop operations," a hotel public relations manager said yesterday. "There are no financial or construction problems with the hotel."

The PR official said the hotel will resume operations within one or two weeks after repairs are completed.

However, several other hotel officials told Shanghai Daily that there are problems with the hotel's investors that forced the hotel to stop operating.

"There are disputes among investors in the hotel about money," said a hotel employee who asked that his name not be used.

Located in the heart of Shanghai's shopping and commercial center, Grand Pacific Suites Shanghai is situated in a 29-story complex featuring eight floors of restaurants and retail outlets.

The building set vacant and unfinished for years, before developers refinanced the project.

Opened for business last September, Grand Pacific Suites Shanghai is invested by some individual investors while managed by Pacific International Hotels, one of the largest hospitality brands in Australia.

The occupancy rate of hotel, which has about 400 rooms, was between 60 to 70 percent before it closed this week. The hotel doesn't have a star rating yet, but average rates range from US$120 to US$130.

Meanwhile, analysts are optimistic about the future of Shanghai's hotel market, betting on the city's vibrant economy.

More than 7,200 new rooms are expected to be built in Shanghai between 2005 and 2008, most of which are in the upper tier segment, according to Jones Lang LaSalle Hotels, a hotel investment services provider.

(Shanghai Daily July 1, 2005)