hospitalitybiz.org

Starwood Hotels & Resorts Worldwide is increasing the number of hotels it manages in Shanghai to at least 12 in the coming year as it competes with other foreign hoteliers for a bigger slice of a thriving market, according to a senior official. 

Starwood was in talks to add at least four hotels in the next 12 months to the eight Sheraton, W and Westin hotels it manages in the city, Asia Pacific president Miguel Ko said. 

The plan indicates a revision of the company’s 2005 proposals to have a portfolio of 10 hotels in the city by 2015. 

“Shanghai is like New York. It is the proxy of growth for the country,” Mr Ko said. Starwood runs 10 hotels in the US city.

Starwood has 37 hotels being built in addition to 31 in operation in the mainland.

The six hotels in Shanghai were among the group’s most profitable in the country, Mr Ko said. Two - a Sheraton and a Four Points by Sheraton - were opened on March 28. 

“There is a supply imbalance on hotel rooms in the short term, but the rates are holding up at an average of about US$200 per room/night in the city’s five-star segment,” he said.

Shanghai, where the average room rate rose for six consecutive years to 1,649 yuan in 2005, would remain China’s rate leader, said Lily Ng, senior vice-president of consulting firm Jones Lang LaSalle Hotels. 

Starwood rivals Four Seasons and Ritz-Carlton each will increase their presence in Shanghai with plans to open their second hotels in the city. 

A common key development strategy for these international players is their decision to adopt an operating role, in contrast to some Hong Kong investors such as Hongkong and Shanghai Hotels, which owns and runs the deluxe Peninsula hotels, and Shangri-La Asia, which invests in and operates Shangri-La hotels and resorts across Asia-Pacific.

“Basically we are a hotel management company, but we will invest in some of our trophy hotels as a showcase on a particular brand,” Mr Ko said. Starwood owns a 32 per cent stake in the 273-room St Regis boutique hotel in Beijing, its only mainland equity investment.

 

 

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