by Ron Bernthal
The 2009 Incentive Travel & Conventions, and Meetings exhibition (IT&CM), brought international travel suppliers and buyers together at the Shanghai Mart-Expo to debate the ramifications of the world’s economic crisis as they sought potential business partners for upcoming incentive, conference, and meeting groups.
More than 300 buyers, from 31 countries, gathered in Shanghai recently to meet with over 200 exhibitors representing 20 countries, hotels, airlines, and group tour operators. They were all attending the 3rd annual IT&CM China, and it appears that business conversations progressed, and contracts were signed, despite the downtown in business travel during the current economic recession.
Although China’s booming tourism and meetings industry may have been hit less drastically than its neighbors across Asia, Chinese hotels and meeting venues have felt the sting of the past year’s travel downturn. In January, 2009, Beijing Tourism Group’s five-star hotels reported only 37 percent occupancy, compared to 73 percent in October, 2008, when the Chinese capital was still flush with visitors lingering after the Olympic period. The city’s visitor arrivals numbers tumbled by 11 percent in the first two months of 2009, compared to last year.
Nevertheless, everyone at the exhibition was optimistic that 2010 and beyond would bring better returns for the meetings industry in China specifically, and Asia generally. Although the Chinese economy grew by only 6.1 percent in the first quarter of 2009, it still fared better than most other countries in the world, and Shanghai government officials announced that their plans for 2010 World Expo were on schedule, a statement that pleased both buyers and sellers at the IT&CM exhibition since everyone was counting on this major world event for incentive and leisure group business.
The 2010 World Expo, to be held from May 1 – October 31, is expected to attract about 70 million visitors to Shanghai, with about five percent expected to be international travelers. It will be the first time that China has hosted a world expo, which dates back to 1851, when the first expo was held at London’s Crystal Palace. Although about 234 countries and international organizations have signed up to participate, only a few have enough funds to construct their own pavilion, but the ones that do will spare no effort in erecting an exciting and iconic structure to best represent their nation.
Hotel expansion in Shanghai is rushing to meet the 2010 World Expo deadline as new hotels move forward with construction plans, and existing properties add to their room count and expand meeting space. The city is expected to have 36,878 internationally branded hotel rooms on line by 2010 (more than 800,000 beds if all categories of hotels are included), up from just 14,974 rooms in 2005. In 2009 alone five new hotels will open, including the Gran Melia, InterContinental Puxi, PuLi, Peninsula, and the InterContinental Shanghai Expo, a 406-room property at the site of the 2010 event.
Other deluxe chains that are expected to open new hotels by 2010 include Kempinski, Marriott, Shangri-La, W, Conrad, Fairmont, and Ritz-Carlton. Although demand for luxury rooms is off this year, and bottom-lines have been hurt by room discounting, Chinese travel agencies, tour operators, and hotel sales manages, are concentrating on China’s huge domestic market to make up for the past year’s fall-off in international visitors. There are still millions of Chinese who have yet to see the towering glass skyscrapers of Pudong, or experience the thrill of riding the 210 mph Mag-Lev train from Shanghai’s airport to the city terminal near downtown, a journey that takes just 7 minutes compared to more than an hour car in heavy traffic.
Another high-speed rail line is expected to open just before the 2010 Expo, linking Shanghai and Hangzhou, a large business and tourism center just 100 miles to the south. The train will cut the travel time between the two cities to 38 minutes, and will also include a station at Shanghai’s Hongqiao Airport, where most domestic flights in/out of the city are based.
In addition to these transportation improvements, Shanghai is constructing new roads, subway lines, the new Shanghai Convention Center, and an upgraded international cruise port. Many of the delegates to IC&CM took official tours of the city, golf outings, and an evening Huangpu River cruise.
Shanghai boasts some wonderful neighborhoods, including the Art Deco-style French Concession district, the historic Old City, the popular Bund section, and the busy, downtown pedestrian shopping street known as Nanjing Road. The world’s highest restaurant sits atop the Park Hyatt Hotel’s 91st floor, part of the Shanghai World Financial Centre, and the Shanghai Art Museum, at People’s Square, offers many interesting exhibits of Chinese art, including ceramics, coins, furniture, and crafts. In 2014, the 128-floor Shanghai Tower will be completed in Pudong, a futuristic skyscraper enabled with rainwater capture apparatus and wind redirecting technology, and will include a shopping center, offices, and a hotel.
The keynote speaker at IT&CM China was Dr. George Zhibin Gu, a respected author and commentator, whose two latest books, China’s Global Reach, and China and The New World, were snapped up by delegates to the conference interested in Dr. Gu’s comments on China’s role in the world economy. When asked about the future of business travel to China in the wake of the economic recession, Gu said that “overseas companies have already set up over 700,000 offices in China. The economic connections are deep enough so that inbound travel will continue at a good pace, and outbound travel will also increase, especially for leisure travel, as higher personal savings accounts, and a lessening of travel restrictions, make it easier for Chinese people to leave the country for overseas trips.”
The Hurun Report, a luxury business magazine known for its “China Rich List” reported recently that one in every 1,700 people on the Chinese mainland have more than $1.5 million USD in personal assets, which translates to about 825,000 Chinese residents who are worth more than 10 million yuan ($1.5 million USD). Shanghai is the third wealthiest region in mainland China, after Beijing and Guangdong Province, and in a survey that will please the hearts of U.S. travel suppliers going after the huge Chinese market, most rich Chinese said that the U.S. was their favorite overseas destination. Yunnan Province and the beach resort city of Sanya, in southern China’s Hainan Province, were the leading domestic destinations among China’s super-wealthy.
These figures, while not surprising to economists who have followed China’s booming industrial growth in the past two decades, was pleasantly shocking to many of the delegates attending IT&CM, and left an optimistic feeling that next year’s Shanghai exhibition will see a surge in buyer and seller registrations.
Best Business Hotels:
Sheraton Shanghai Hongqiao
Located a short walk from Shanghai Expo-Mart, this 587-room full-service property offers four restaurants, fitness centre, Internet access, and well-appointed rooms, including 40-inch LCD satellite TV. Convenient to city subway system and highway.
Rates: from $169 per night, double-occupancy.
Sheraton reservations: 1-800-325-3535
Le Royal Meridien Shaghai
A downtown location on People’s Square, with French-influenced design and ambience, and beautiful views from the upper rooms. The 761-room property was voted Best Business Hotel in Shanghai by TTG (trade publication). Le Bistrot restaurant for breakfast, Ai Mei for Cantonese cuisine, and Allure restaurant for French food, as well as several other dining properties. Indoor pool and fitness centre.
Rates: from $188 per night, double-occupancy
Le Méridien reservations: 1-800-543-4300
Two towers in the new and fashionable Pudong district, surrounded by a brightly-lit galaxy of hotels, office towers, and eclectic architecture. The property includes The Grand Tower, with 375 rooms, and River Wing, 573 rooms. Together they offer two health clubs and pools, spa, outdoor tennis, and over a dozen dining venues. A huge ballroom and lots of conference and meeting bring corporate events.
Rates: from $236 per night, double-occupancy
Shangri-La reservations: 1-866-565-5050
Lonely Planet’s Shanghai City Guide, 4th Edition. Descriptions of city attractions, hotels, and restaurants, including a handy pocket map, visitor information on towns in Shanghai’s far-flung suburbs, and updated ground and air information for visitors travelling independently.
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