Hotels in major Chinese cities are expected to retain their strong momentum in the coming few years amid increased demand for accommodation from both domestic and overseas travelers, a newly-released American Express Consulting hotel industry report has predicted.

Government investment in the Meetings, Incentives, Conferences and Exhibitions (MICE) sector has also boosted the hotel market and will continue to do so in the run-up to the Olympic Games.

In Beijing, while supply would increase by more than 10 percent this year as anticipated by the Beijing Municipal Tourism Bureau, demand growth will still remain very strong over the next few years, fuelled by increases in domestic and international tourism and the continued rapid rise of China's gross domestic product.

International MICE operators are expanding their footprint in the city to include Financial Street, Xidan, Zhongguancun, and the area south of Chang'An Avenue.

Meanwhile in Shanghai, which boasts the most established hotel industry in China and has well-developed tourism infrastructure, visitor arrivals are expected to continue to grow strongly in line with the city's position as a global commercial center and gateway to the thriving Yangtze River Delta economic region.

Another key driver for the market is that the municipal government has begun to upgrade its existing tourism infrastructure and seek new demand generators at the same time.

For instance, the city plans to renovate the Bund and promote cruise tourism along the Huangpu River. And, when completed in 2010, the Shanghai Happy Valley will also become the largest theme park in Eastern China.

For Hong Kong, which is said to have some of the best transport, communication and tourism infrastructure in the Asia-Pacific region, market prospects also remain rosy.

Its hotel occupancy levels will continue to rise with the MICE market remaining a primary focus, the report said.

The individual visit scheme will continue to drive mainland tourism while aggressive marketing events such as Winterfest and attractions such as Disneyland will further boost businesses for hotels.

(Shanghai Daily January 21, 2008)