Local hotels are more cautious on expanding despite their overseas rivals’ aggressive expansion in the top end of the hotel market in Shanghai, which saw an average 80 percent room occupancy rate.“Due to the growing number of important domestic and international conferences in Shanghai, we have an 80 percent occupancy rate, and this will continue in the coming years,” said Linda Dai, a public relations official of the Intercontinental Pudong Shanghai.

“There is currently a lack of hotel rooms in some cities in China, including Shanghai, and especially among five-star hotels. Current estimates indicate a severe shortage despite likely demand during the World Expo 2010 in Shanghai,” said Paul Kirwin, president and managing director of Carlson Hotels Asia Pacific.

“We have adopted an aggressive growth strategy for the next few years. This includes two hotels recently opened in Shanghai - The Regent Shanghai luxury hotel and the Radisson Hotel Pudong Century Park,” he added.

Accor, a renowned European hotel brand, will build two new luxury hotels that will open in 2007 and 2008.

On the other hand, local hotel groups have a more cautious development strategy.

An administrator, who declined to be named, from the development department of Jin Jiang International Hotel Management Co Ltd, the largest home-grown hotel management firm in China, said the firm will be more focused on the budget hotel segment’’ and “have no plans to set up any new five-star hotels in Shanghai.”

Zhao Xianglong from HVS International, a global consulting and services agency, cited limited financing as curbing the development of local five-star hotels.
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