Exploding world of Shanghai’s resorts and hotels

On Aug 8, Oriental Pearl Real Estate Ltd announced that it is investing in a project that will transform 50 blocks of villagers’ homes into a bedand-breakfast, or B&B, village, just 5 km from the Shanghai Disney Resort.

A shuttle bus will link the village and the theme park.

This is the latest example of real estate developers investing heavily in a variety of hospitality projects aimed at providing accommodation and other services to millions of visitors who are expected to throng the Disney destination in the years to come.

More than 10 developers have been building up commercial complexes in the Pudong area which houses the Shanghai Disney Resort. Hospitality is one of the sectors that will likely benefit a lot from Disney, said analysts.

The two in-house Disney hotels in Shanghai receive 1,000 tourists per day who spend 2,950 yuan each on average. That is, the two hotels gross around 3 million yuan in daily revenue on average occupancy rate of 95 percent, higher than the city’s average of 70 percent, according to the Shanghai Tourism Bureau.

That’s hardly enough to meet the current and expected demand for accommodation.

“The Disney hotels are fully booked despite their high prices, and hostels in neighboring towns are also fully booked, which shows that demand at all levels, from budget to luxury, is huge,” said Wang Hongqing, CEO of the Hospitality Alliance of Chuansha area, which hosts the

blocks of villagers’ homes will be transformed into a bed-andbreakfast village by Oriental Pearl Real Estate Ltd, 5 km from the Shanghai Disney The number of developers that have been building up commercial complexes in the Pudong area where the Shanghai Disney Resort is located.

Shanghai Disney Resort.

Wang said hotel room rates have more than doubled since Disney’s opening in May. Further studies may be necessary to understand the nature and extent of tourists’ demand and market players’ capability to meet it, he said.

A branded budget hotel chain 1.5 km from Disney now charges 700 yuan per night for a room, up about 120 percent from August 2015. In comparison, the corresponding rate at its sister concern at Lujiazui, Shanghai’s financial hub, is about 600 yuan now.

Surging room rates reflect the huge gap between demand and supply.

According to the Shanghai Tourism Bureau, Disneyland may attract 15 million tourists per year, among whom 30 percent need to stay in a hotel. This means, 4.5 million visitors will likely seek to stay at a hotel in the area every year.

That translates to an estimated demand for 2 million roomnights per year.