ALTHOUGH Shanghai expects more than 6,000 new hotel rooms this year, revenue per room has fallen in the first half of this year, said a recent HotelBenchmark survey by Deloitte.
According to the half-year survey, revenue per available room fell 1.2 percent to US$97 in the first six months as new hotel openings have diluted occupancy levels and slowed performance growth.
A local government official predicted such a scenario not long ago.
Chen Xueyu, an official with the Shanghai Tourism Administrative Commission, the local hotel industry watchdog, said earlier that the average occupancy rate for the city's hotels will likely continue its downward trend this year as a result of an imbalance between market demand and supply, while hotel room rates in Shanghai are expected to diversify in different categories.
However, the survey said the whole country is seeing huge developments in its hotel industry and Shanghai's room rate level still remains on a par with the average in the Asia Pacific region.
Meanwhile, the Deloitte industry survey concludes that the hotel market in Asia Pacific is seeing much stronger growth this year than last.
Room revenue per available room across the region rose 14.1 percent to US$97, outperforming the 9.4 percent growth achieved in 2006. Average room rates now stand at US$137, the survey showed.
Asia Pacific continues to build on and benefit from its position as the world's second most-visited region after Europe, according to the survey.
Asia's volume of international tourism receipts equaled the Americas for the first time last year. And latest figures from the World Tourism Organization showed that it has seen the strongest growth in international tourist arrivals during the first four months of this year.
Resort destinations have been the key winners.
Bali in Indonesia has continued to recover despite fresh travel warnings of terrorist threats. It achieved the region's highest revenue per available room growth at 58.6 percent in the first half, an incredible turnaround for the island, which has struggled since bomb attacks killed tourists in 2002 and 2005.
Improvements have been largely driven by a 37.6-percent occupancy rise, underlining returning public confidence in the island.
Meanwhile, Penang in Malaysia and Phuket in Thailand also experienced revenue per available room growth of 18.4 percent and 39.6 percent respectively in the six-month period. Average room rates have reached US$111 in Phuket, largely due to the increased accessibility of the islands, as low-cost airlines connect resorts to the region's gateway cities.
Moreover, the Deloitte survey has also found this trend has allowed developed resorts such as Phuket to take business tourism away from larger cities in the region.
Bangkok has struggled with this, while problems at Bangkok's new Suvarnabhumi Airport with cracks on the runway have restricted international flights. Occupancy in the Thai capital is down 7.8 percent compared to last year, curbing revenue per available room at US$82.
Elsewhere in the region, Ho Chi Minh City in Vietnam recorded 49 percent growth in terms of revenue per available room - the region's second highest - while Hanoi grew 34.4 percent. A shortage of hotel rooms in Vietnam is also enabling hoteliers to drive up performance, the survey said.
Singapore and Manila also continued their impressive form, with strong revenue per available room rises driven by average room rates.
In India, a limited supply of rooms and increased demand in the business travel sector has helped Mumbai secure the region's third-highest growth in revenue per room, an impressive 46.7 percent increase to US$197. This was again driven by soaring average room rates, which at US$253 are the highest in Asia.
"The Asia Pacific hotel market continues to perform well with performance dominated by improvements in average room rates," said Lorna Clarke, executive director of HotelBenchmark at Deloitte.