In China, There's Too Much Room at the Inn

For its new Andaz boutique hotel in Shanghai’s bar and entertainment district, Hyatt Hotels spared no expense: Rooms boast color-adjustable lighting and glowing translucent bathtubs that offer a view of the city’s old French Concession area through floor-to-ceiling windows. There’s even a 23,672-square-foot spa and a water-surrounded glass pavilion for weddings and red carpet events.

The month-old Andaz is one of 19 five-star hotels that have opened in Shanghai in the past five years. Many boast eye-popping luxuries. What they lack is enough guests. The city’s hotel occupancy rate stood at 54.4 percent for the first nine months this year, down from 64.4 percent a year earlier when the city hosted the World Expo, says consultant STR Global. (Hyatt declined to disclose its Andaz occupancy rate.) By comparison, more than 80 percent of rooms were filled in Singapore and Hong Kong. Similar overcapacity is a problem across China, with a national hotel occupancy rate of 61 percent through September, the lowest in Asia, except India, among 15 countries tracked by STR Global.