Many cities in the region would want to be in the enviable position Shanghai is in. Investments are pouring in and business traffic is booming. JAN KOT reports.

With a robust economy, a strong influx of foreign direct investment and the increasing number of MNCs setting up shop in the city, Shanghai’s inbound business travel sector never had it better than in the past year.

Carlson Wagonlit Travel Shanghai office general manager, Mr Wu Ke-jian, said: “We have seen an average growth of 15 per cent in the volume of air ticketing by our corporate clients over the last year.”

He added the growth of business travel was prompted by MNC investment in Shanghai and the relaxation of tourism regulations. “China’s opening of its skies to European and American airlines has increased the number of direct flights between the continents and accelerated the mobility of corporate travellers.”

Statistics show the city’s gross domestic product reached RMB744 billion (US$90 billion) in 2004, representing a year-on-year rise of 13.5 per cent. Last year Shanghai absorbed US$11.69 billion in contracted foreign capital, up 12.6 per cent from 2003. Sixty per cent of all Fortune 500 companies have offices in Shanghai, more than half of these are regional headquarters. Shanghai’s five-star hotels also turned in a strong performance in 2004, achieving an average occupancy of 80 per cent with the average room rate exceeding US$170.

In the first quarter of this year, five-star hotels recorded an average occupancy of about 72 per cent with an average room rate of close to US$190. The rate, already 61 per cent higher than Singapore’s and 53 per cent higher than Bangkok’s, is expected to grow beyond the US$200 mark by the end of 2005.

The burgeoning business travel market has also attracted the interest of serviced residence companies such as Ascott International.

The Singapore-listed group plans to launch a fourth serviced residence in Shanghai next year.

By adding the Citadines brand, Ascott will be able to provide its clients with the entire range of luxury to mid-tier residences within the city. Despite high rates, there is plenty of business to go around.

Mayfair Hotel Shanghai general manager, Mr Joseph To, said: “If our guests need to stay in town for longer than two months, we will refer them to the serviced apartments. The whole Shanghai market is booming. There are so many housing options that can cater to different needs.

“Hotels are no longer the only choice for business travellers.”

The average length of stay at Shanghai’s five-star hotels ranges between 2.5 and three nights.