A luscious expansion

More hotel rooms are coming online in the luxury sector, anchoring Shanghai’s appeal for both international and domestic incentives.

Shanghai’s glamorous dining and party venues, many located in heritage buildings along the Bund, are attractive to luxury event clients

Shanghai’s appeal as an exciting destination for international business events continues to grow, and the addition of a number of high-end hotel brands is giving room for the city to go after more luxury incentives.

Shanghai’s glamorous dining and party venues, many located in heritage buildings along the Bund, are attractive to luxury event clients

Notable additions include the Bellagio by MGM Shanghai, the St Regis Shanghai Jingan, Capella Shanghai Jian Ye Li, and W Shanghai – The Bund. Also opening are boutique brands with between 100 and 150 rooms, like Bulgari, Edition, Middle House and Sukothai.

In February, for example, all 55 of Cappella Shanghai’s one-, two- and three-bedroom villas, were booked by a China-based finance company for a one-night stay that was combined with an off-site dinner as its annual company incentive.

According to Yvonne Peng, Cappella Shanghai’s director of sales and marketing, the hotel is also seeing demand for events that mix luxury lifestyle and business.

For incentive groups from Europe and North America, Violet Wang, destination manager of Pacific World in Shanghai, said the budget for luxury programmes ranges between 2,000 euros (US$2,466) and 3,000 euros per head, and while 5,000 euros per head is rare, it is not unheard of.

Kris Van Goethem, inbound and MICE director, Thomas Cook MICE, added that a big part of what appeals to European clients are Shanghai’s nightlife – think dining venues like Lost Heaven and the House of Roosevelt, and entertainment hotspots like Bar Rouge and M1NT Club.

DMCs TTGmice spoke to noted that popular incentive activities organised in Shanghai include visiting the growing number of boutique art galleries, restaurant hopping, meeting the locals for tai chi or dancing, and going on a bespoke tour on a public double-decker bus.

As well, new products are especially important to draw international corporate meeting and incentive groups that head to China to do business followed by a two- to three-day incentive programme.

Set up in 2016, regional DMC Faces of China, whose co-founder is Asian incentive veteran Jacques Arnoux, invested in its own booth at IMEX Las Vegas last year.

Cindy Zhang, its CEO, said: “We have created a new VR/AI product for the Shanghai Museum, and we are planning to target special interest incentive groups and high-profile incentive clients interested in Chinese art and culture, and want deeper knowledge.” She added that they will be doing “more at IMEX Frankfurt” this year as France and the US are its key markets.

Industries targeted include manufacturing, IT, insurance automotive, and pharmaceuticals looking for a traditional incentive programme, Zhang noted.

Another plus for Shanghai are its fairly stable hotel rates.

“Hotel demand in Shanghai is increasing but so is supply, and that is keeping hotel rates stable,” Pacific World’s Wang opined.

As for Shanghai rate increases, Julien Delerue, general manager of RFP platform 1000meetings, observed there was a “10 per cent growth for MICE group rates on room accommodation year-on-year in 2017 versus 2016 for five-star international hotels – RMB1,045 (US$166) in 2017 versus RMB945 in 2016”.

It was seven per cent for four-star international hotels – RMB645 in 2017 versus RMB600 in 2016, he added, and noted that similar rate trends are expected in 2018.
As China’s financial hub, domestic demand for Shanghai also plays a major role.

Chris Tsoi, general manager, St Regis Shanghai Jingan, said: “The hotel business in China has evolved and high-end domestic events are driving demand. Hoteliers have to ask if it is still worth the investment to promote in longhaul markets and attend shows like IT&ME in the UK.

“In the automotive industry, for example, local manufacturers don’t even have to set (incentive) targets for distributors (as business is going well). They just invite their partners to high-end events to continue building the relationship,” Tsoi shared.

Cheryl Yue, executive assistant manager – sales and marketing, W Shanghai – The Bund, agreed.

“China is now like the US and the domestic market is very important. Between 20 and 30 per cent of our business is domestic, and China, the US and Hong Kong make up our top three markets,” she shared.

Meanwhile, Shanghai’s hotel inventory will continue to expand at the 28ha Shanghai Hongqiao Economic and Technological Development Zone, located 5.5km away from Shanghai Hongqiao International Airport. The space is currently being developed for commerce and business events, and is where the mega National Exhibition and Convention Center is located.

According to a Shanghai business events official, the area will house 100 new international chain and domestic-branded hotels in the next three to five years.

There are now 51 hotels in the area, with around 14 business and higher-end hotels providing some 4,400 rooms, and 32 in the economy category providing another 4,000 rooms.

 

This story was first published in TTGmice May 2018 issue, as part of a destination feature on Shanghai. Access TTGmice electronic magazines by clicking here.

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