The booming hotel industry in Shanghai is expected to attract more foreign investment in coming years, according to a report by Jones Lang Lasalle property and investment management company.

Nearly half of the hotels in Shanghai were state-owned in 2004 and just 7.9 percent were owned by overseas investors as well as those from China's Hong Kong, Taiwan and Macao, says the report.

Strong demand from businesses, meetings, and tourists would boost the industry and attract more foreign capital, says the report.

Shanghai is expecting more than 70 million overseas visitors for the 2010 World Expo, exceeding the current capacity of its hotel industry.

The city had 351 high-class hotels last year, including 66 five and four-star hotels.

The average daily price of a five-star hotel room hit a record 1,649 yuan in 2005, 16.4 percent up from 1,417 yuan the previous year.

Shanghai Tourism Committee estimates the total number of beds in will rise from the present 90,000 to 400,000 in 2010.

But the report also warns that newcomers in the industry would face tighter loan conditions and land supply restrictions as the city government took more macroeconomic control measures.

City government figures show Shanghai received 4.4 million overseas tourists last year, up 15.3 percent from 2004. Overseas tourists accounted for US$3.6 billion in revenue last year, a 16.9 percent increase year on year.

(Xinhua News Agency August 31, 2006)