Shangri-La widens its horizon

Caretti: 'We plan to have 40 hotels in China by 2008 and 111 worldwide by 2010'.

THE Bund – the symbolic landmark of Shanghai – is simply breathtaking when viewed from Pudong Shangri-La’s Horizon Club Lounge.  

“I think we have one of the best views of the Bund,” said Pudong Shangri-La vice president and general manager Philippe Caretti. 

“I like to be here. When I look out, it gives me space for my imagination to flow.” 

Caretti is proud to point out that the hotel’s patrons can also enjoy this beautiful scenery from their rooms – something that adds value to the luxury hotel. 

Pudong Shangri-La is at this prime spot because it had the foresight to buy the land early when Pudong, which is now the most modern part of Shanghai, was just muddy farmland. 

Caretti, who has been with the group for 12 years, remembers that Shangri-La Hotel was the only tall building around when it first moved to Pudong in 1998.  

“We were surrounded by green fields. But it’s amazing looking at the development pace over the past five years,” said the Swiss hotelier. 

The Shangri-La Group, founded and owned by Malaysian tycoon Robert Kuok, is not only the early bird in Shanghai’s Pudong, but also in China.  

Two decades ago, the group started building luxury hotels in the Middle Kingdom. 

China’s first Shangri-La Hotel is in Hangzhou – a holiday destination that the Chinese declare as “heaven on earth” since ancient days. The hotel was opened in 1984, followed by the second one in the capital city Beijing. 

China has been the focal point of the Shangri-La group in the past 20 years. This strategy is well rewarded. The group has grown with China’s economic miracle.        

“All our hotels in China are making profits,” said Caretti. 

A magnificent view of Pudong Shangri-la along the east bank of Huangpu River. The hotel is the most profitable one among the group in China, with occupancy rate above 80%. - Picture courtesy of Shangri-la Hotels and Resorts.

China is the largest earnings contributor, in terms of geographical area, accounting for about 35% of the group’s revenue.  

Pudong Shangri-La, which opened its Tower II in September last year, is the most profitable one with occupancy rate above 80%.  

Shangri-La group now manages and owns 19 hotels in China, including Harbin in the northeast, Suzhou in the east, and Shenzhen in the south. 

It is currently the largest luxury hotel group in China and Asia Pacific. 

Definitely Shangri-La group is not content with what it is now.  

“We plan to have 40 hotels in China by 2008 and 111 worldwide by 2010,” said Caretti. 

“We are expanding beyond Asia Pacific now.”  

Paris, Tokyo, Las Vegas and Chicago are among the cities that Shangri-La wants to penetrate. 

Having set its footholds in the major Chinese cities, the hotel group is getting into the second-tier cities in the less developed provinces, which will soon enjoy the spillover effect from the economic boom in the coastal areas. 

A survey by financial magazine Hurun shows Shangri-La is the preferred hotel brand among China’s elite. 

Being the preferred hotel brand, Shangri-La has laid the firm foundation to ride on this Chinese consumption boom. 

Many international hotel groups are expanding into China as they start to realise that it is a big market that should be tapped. 

However, Shangri-La group is seen to be one step ahead as it has already set its sight on serving its Chinese customers abroad.  

Practising Asian values has made Shangri-La today’s leading hotel group in the Asia Pacific. 

Will the group repeat its success story in the western world with this set of oriental values? 

This is certainly a challenge to Shangri-La. Nonetheless many would not deny the possibility given the group’s track record. 

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