Shanghai-based hotel, tourism and transport companies are likely to extend gains this year as a jump in visitors during the city’s World Expo may increase earnings by 20 percent.
The expo is expected to boost spending by about 100 billion yuan ($14.7 billion) during its May-to-October run, or about a fifth of the city’s retail sales, Zhang Kun, a Shanghai-based strategist at Guotai Junan, the nation’s second-biggest brokerage by revenue, said today.
Shanghai Jinjiang International Hotels Development Co., China’s largest hotel operator, Shanghai Oriental Pearl Group Co., operator of the tallest television tower, and Shanghai International Airport Co., which manages the second-busiest airfield, will be the largest beneficiaries, he said.
“Earnings at these Shanghai-based companies may be boosted by about 20 percent this year due to the World Expo effect,” Zhang said in a phone interview yesterday. “Hotel operators may be the biggest beneficiaries among all these industries. Should more people visit the city than expected, it’s inevitable we will see room rates increased.”
A total of 192 countries, including the U.K., France and Japan, and 50 international organizations will take part in the Expo, which starts May 1, according to the Expo’s Web site. Organizers are expecting 70 million visitors, with about 95 percent expected from within the country.
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Hotels in Shanghai’s Pudong district, which plays host to the Expo, are likely to see occupancy rates rise by 50 percent, according to the area’s tourism chief.
“Occupancy rates for hotels in Pudong during the Expo period should be able to reach 90 percent on average” compared with “nearly 60 percent” last year, said Chen Zhongmao.
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