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SINGAPORE (Reuters Life!) - Luxury may be taboo these days, but it's a choice The Hongkong and Shanghai Hotels Ltd group wants travelers to have, despite the downturn, when it opens a Peninsula hotel in Shanghai this year.
The Peninsula Shanghai's 3 billion yuan ($439 million) complex includes a 235-room deluxe hotel, a shopping arcade, a residential tower -- and is the first building to rise on the city's historic Bund waterfront in 60 years.
The hotel, due to open in October, is the ninth property in the portfolio of a group renowned for its bespoke fleet of Rolls-Royce limousines and unabashed dedication to the good life: the Peninsula has a team of engineers that develop guest-friendly gadgets and tests the features in each room before it is built.
General Manager Paul Tchen said that while the financial crisis would probably keep high-end leisure and business travelers away for now, the downturn would not last forever, and the hotel was built with the future in mind.
"Unfortunately, in today's economy, luxury hotels are not very fashionable," Tchen told Reuters.
"But we open hotels for the next generation, we are cautious about what we invest in, and during these times, we can stand the pain more than other companies," he said during a visit to Singapore to promote the new hotel.
Asia's multi-billion dollar tourism business has been hit hard by the shortage of well-heeled tourists and corporate travelers due to the slowdown, with hotel room rates falling this year for the first time in years and airlines suffering.
Average hotel room revenues across Asia and Australia fell by a third in the first quarter of this year from a year earlier, according to Deloitte, which also said that occupancy levels across the region dropped by 15 percent. In Shanghai, hotel room revenues have fallen by almost 40 percent.
Tchen said the hotel was, for now, marketing itself within China, which has been affected, but not too much, by the economic downturn, as well as in other parts of Asia where there is still an appetite for luxury.
Room rates have also been discounted for the first few months after opening, and now start at 2,009 yuan ($294) a night, including breakfast and airport transfers, compared to the rack rate of 3,200 yuan ($468).
"We're heavily targeting the one market that's not so badly affected, and that's our domestic market. We want to bring back the fun, the excitement of staying at a luxury hotel, turn the experience into an escape for locals and for other business travelers from the region," Tchen said.
In homage to Shanghai's colonial heyday in the 1920s and 1930s, when it was dubbed the Paris of the East, the Peninsula Shanghai is designed in an art deco style, but with high-tech, modern facilities and luxurious fittings.
The hotel has sweeping terraces, and views, of the city and it also plans to host ballroom dancing afternoon tea events.
Shanghai, which is hosting the 2010 World Expo, is spending more than $700 million to spruce up the Bund -- whose name comes from an Anglo-Indian term for a river embankment -- and turn the area into a pedestrian-only zone.
The 2-km (1.24-mile) strip is famous for its art deco buildings, many of which have been restored to their former glory after having been allowed to fall into disrepair when the Communists came to power in 1949.
Editing by Sanjeev Miglani