Eager to explore the city's market potential, the Pudong Shangri-La, Shanghai is to officially launch its second tower on Monday, making it the largest luxury hotel in Asia with 981 rooms.

"We are entering a new phase of the Pudong Shangri-La where the hotel will maintain a competitive edge for the next five years, with the new facilities we have today and a variety of trend-setting restaurants, bars and lounges," said Philippe Caretti, vice-president and general manager of the Pudong Shangri-La, in an interview with China Daily.

Not only will the new 36-storey tower add another 375 deluxe rooms of 54 to 64 square meters each and a new 1,700-guest ballroom to the original establishment, it will also bring a variety of new options to Shanghai's leisure and restaurant scene. While cuisines as exotic as Moroccan and as homely as Chinese noodles are available, the hotel also hopes the all-luxurious CHI - The Spa at Shangri-La will provide an unforgettable experience for guests.

Shanghai's booming economy, prosperous tourism, convention and exhibition industries are obviously factors that have prompted the expansion of Shangri-La as well as other big names in the hospitality industry. Currently, Shanghai has 25 five-star hotels, yet many international groups are still keen on building new ones here.

"I have been in Shanghai now for four years and have seen a steady growth of the hospitality industry," said Caretti from the hotel's Horizon Club Lounge overlooking the city's Huangpu River and the legendary Bund on the other side. "The demand for deluxe rooms is growing faster than we are able to provide."

Statistics from Jones Lang LaSalle, one of the world's leading real estate services and money management firms, indicate that the average occupancy rate among Shanghai's five-star hotels reached 74.3 per cent in the first eight months of this year, and the figure for the whole year could be around 80 per cent as the following three months are peak season for the hospitality industry.

It has been predicted that by 2007, the Pudong New Area, which hosts an increasing number of multinationals' offices and where one of the city's major conference and exhibition venues is located, will still be lacking in deluxe hotel rooms.

The Shangri-La plans to open three more Shangri-La hotels and one Traders Hotel in Shanghai before 2010. By then, it will also expand its presence in China from the current 19 hotels to 59, accounting for more than half of its world total of 111.

"We are expanding worldwide, but still the focus is China," said Caretti.

Caretti expects that the US$138 million investment for the new tower will be returned within eight years, and with the influx of tourists after the 2008 Beijing Olympics and the ensuing 2010 World Expo in Shanghai, the process could be even shorter.

(China Daily September 24, 2005)