"Big fish eats small fish" is an unchangeable law of the ocean, but it seems to apply to Shanghai's hospitality industry too, according to a recent government report.

The report shows the overall hotel and guesthouse industry is healthy but some are healthier than others.

For example, larger, more- expensive, foreign-funded and managed enterprises were last year's major winners.

Last year, the daily occupancy rates for local hotels with more than 500 rooms was 68.9 percent, according to the report issued by the Shanghai Statistics Bureau.

Guesthouses with fewer than 49 rooms had an occupancy rate of 44.2 percent. The report stated there was a 24.7-percent margin.

The occupancy rate of very modest hotels, which were not allowed to receive foreign guests, was just 44 percent, while star-rated hotels enjoyed an average occupancy rate of 63.8 percent.

These facilities hosted 16.02 million guests last year who stayed an average 3.3 days.

That huge number of people, about equal to Shanghai's population, brought in revenue of 9.754 billion yuan (US$1.175 billion).

Last year, about 80 million people visited Shanghai, a 5-percent increase over those who visited the city in 1999.

The average daily room rate rose to 265 yuan last year from 253 yuan a year earlier.

State-owned hotel management groups run more than half of the city's hotel industry, but their business did not meet that of overseas-funded or managed hotels.

Overseas-invested or managed hotels, which represent just 6.6 percent of all city hotel rooms, generated 2.66 billion yuan last year, accounting for 27.3 percent of the industry's revenue.

"Foreign hotel groups have branches all over the world, they attract foreign travelers more easily, while we have to hire agencies to draw foreigners to Shanghai," said Zhao Lifei, assistant general manager of Peace Hotel. "Though we have many domestic guests, their spending power obviously cannot match that of foreign guests."

Volkmar Ruebel, general manager at Hilton Shanghai, said foreign visitors tend to stay at familiar hotels. "Business travelers with very little time in the city need the assurance of a familiar name they can trust," he said.

As for business during the first half of this year, different hotels report varied performance. Peace Hotel's daily occupancy rate dipped 4 percent to 66 percent. Pudong Shangri-La's occupancy rate shrank 8 percent to 70 percent, but its room rate climbed 30 percent.

Grand Hyatt Shanghai and Portman Ritz-Carlton reported increases in both occupancy rate and revenue.

According to Shanghai Statistics Bureau, the city had 2,710 hotels and guesthouses with a total of 96,800 rooms and 195,100 beds last year.

The average daily occupancy rate rose to 54.4 percent from 49.7 percent a year earlier. The average daily occupancy rate of state-owned hotels was 58.5 percent last year while the average daily occupancy rate for overseas-funded or managed hotels was 65.2 percent.

(Eastday.com.cn 08/01/2001)