- The Washington Times - Tuesday, July 7, 2009


Global travel may be ailing, but China’s biggest city, Shanghai, is pursuing luxury travelers with a vengeance, bent on restoring a reputation for opulence and elegance that once made it the Paris of the Orient.

As it spruces up for next year’s six-month-long World Expo, the metropolis of 20 million is transforming itself from a gritty industrial hub of crammed tenements into a showcase of glittering skyscrapers, quaint but quiet alleyways and meticulously landscaped parks.

A complete makeover of the legendary Peace Hotel, which sits astride the city’s riverside Bund, is one of scores of projects aimed at packaging the city’s Western colonial-style heritage for upscale travelers.

“The barrier is just being pushed higher and higher,” said Rupert Hoogewerf, a Shanghai-based researcher of wealthy Chinese. “Previously, [the hotels] may have sought to be the best in the city. Now they’re aiming to be the best in the country, or the world.”

Shanghai may not be the first name that pops into mind when it comes to elite travel destinations, but luxury tour operators are flagging it as a choice option, especially for shopping and gourmet dining.

Shanghai is “hipper than Hong Kong and more alluring than Beijing,” said Concierge.com.

“The city is probably China’s most fashionable and international, boasting the best shopping and nightlife,” said luxurytravel.com.

A new cruise-liner terminal is now a regular stop for deluxe Yangtze River tours; a recently opened Peninsula Hotel and the Hyatt on the Bund, both nearby, offer stunning views of the Huangpu River and the Bund’s majestic colonial architecture.

“We’re up against the Ritzes and Park Hyatts. We can’t skimp on luxury,” said Ian Carr, a principal at Hirsch/Bedner Associates Pte, the design consultants hired to handle the Peace Hotel’s refurbishment into a Fairmont-managed hotel.

“This is the most competitive market in the world, here in Shanghai and Beijing, for luxury hotels,” he said.

Just a few years ago, that would have been hard to believe. But key parts of the city have been transformed by a craze for upscale urban renewal, encouraged by authorities keen to boost real estate prices and lure wealthy investors, both foreign and domestic.

Freshly renovated art deco masterpieces and colonial-style villas in the leafy former French concession house sidewalk cafes, luxury boutique hotels and elegant restaurants, including one run by renowned chef Jean-Georges Vongerichten.

Shanghai’s planners expect 70 million visitors to next year’s Expo, to be held in waterfront plazas that have replaced rusting steel mills and shipyards along the Huangpu River, which slices the city into crammed, older Puxi to the west and ultramodern Pudong sprawling to the east.

China’s biggest event since last year’s Beijing Olympics is expected to draw scores of dignitaries and other elite travelers.

Then there is the domestic crowd: The latest count put the number of mainland Chinese worth more than $1.3 million at 825,000. Among them, at least 116,000 lived in Shanghai.

The news for travel this year, luxury or otherwise, is discouraging.

Shanghai’s tourism arrivals were down about 11 percent from January to April from the year before, while hotel occupancy rates averaged 46 percent, down about 10 percentage points from a year earlier. Room rates are down by 20 percent to 50 percent, according to the Shanghai Tourism Administration.

“Frankly, it’s ugly. I’m dressed in black for a reason, you know,” Martin Symes, chief executive officer of travel search company Wego, said at a conference that opened a regional luxury travel fair at Shanghai’s ornate Exhibition Hall last week.

Though business at the fair reportedly was slower than in the previous two years, so far only a handful of Shanghai’s own projects have been suspended or delayed because of the economic downturn - among them the completion of two luxury hotel towers just down the street from the city’s chic Xintiandi district.

Most of the world’s top hotel operators are expanding here: As of the first quarter of this year, China had 964 hotels, or 260,560 rooms, under construction or in planning, according to Portsmouth, N.H.-based real estate consulting firm Lodging Econometrics.

Nearly two-thirds of those were luxury-grade hotels.

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