WORLD EXPO - SHANGHAI, 2010Prepared by Adhiyanto Goen

World's Fairs originated in the French tradition of national exhibitions, a tradition that culminated with the French Industrial Exposition of 1844 held in Paris. It was soon followed by other national exhibitions in continental Europe, and finally came to London where the first real international exhibition was held.From the first World Expo held in London in 1851, the world expos have been held successively for many years. After the 1933 World Expo Chicago has set up its theme, the following expos also began to have their special themes.Click here for more background

History

1993 - Taejŏn, South Korea

From 7 August to 7 November, 1993

108 nations participated

15 million visitors

Official web (Korean) - http://www.expopark.co.kr/

Archive - http://en.wikipedia.org/wiki/Expo_%2793

1998 - Lisbon, Portugal

From 22 May to 30 September, 1998

155 countries participated

10,128,204 visitors

Official web - http://www.portaldasnacoes.pt/

Archive - http://en.wikipedia.org/wiki/Expo_%2798

2000 - Hanover, Germany

From 1 June to 31 October, 2000

155 nations participated

25,210,000 visitors

Official web (Germany) - http://www.expo2000.org/index1.php

Archive - http://en.wikipedia.org/wiki/Expo_2000

2005 - Aichi, Japan

From 25 March to 25 September 2005

125 countries participated

22,049,544 visitors

Official web - http://www.expo2005.or.jp/en/

Archive - http://en.wikipedia.org/wiki/Expo_2005

2008 - Zaragoza, Spain

From 14 June to 14 September 2008

104 countries participated

6 million visitors

Official web - http://www.expozaragoza2008.es/

Archive - http://en.wikipedia.org/wiki/Expo_2008

World Expo Visitors

15M

10M25M

22M

6M

70M

19931998

2000

2005

2008

2010 (forecast)

“95 percent of the 70 million visitors would be native Chinese, and the remaining 5 percent were foreigners” said Zhong Yanqun, deputy

director of the Expo National Organizing Committee

2010 - Shanghai, China

From 1 May to 31 Oct 2010

200 nations and international organisations participation forecasted

70 million visitors forecasted

Official web - http://en.expo2010.cn/

Archive - http://en.wikipedia.org/wiki/Expo_2010

INTERNATIONAL PARTICIPANTS' PAVILIONConcepts

Shanghai Intro

Shanghai is the largest city in China, and one of the largest metropolitan areas in the world,with over 20 million people.

The famed Bund and its statues have for decades symbolized Shanghai's glamour andpositioning as the country's premier financial centre.

The focal point of the Yangtze River Delta economic development, Shanghai has become a global business destination.

The development of Pudong, as the designated new financial hub of modern China (PRC) and home to the Shanghai Stock Exchange and Shanghai Pudong International Airport, has also elevated Shanghai's status in the financial sector.

The re-development and expansion of various industrial zones, as well as a booming tertiary sector has resulted in strong economic growth over the past couple of years, averaging 16.5% per annum. By 2010, GDP is estimated to reach CNY 150 billion.

Market Condition

The MICE segment has been a key demand generator for Shanghai hotels over recent years.

Favored for its international reputation and world-class facilities, the expansion of the New International Expo Centre and hosting of World Expo in 2010 will reaffirm Shanghai's status as a premier MICE destination.

Diversification of the city's leisure offerings, such as Chongming Island's "Green Tourism" and the "Pedestrian Zone" in front of The Bund, are also expected to boost tourism demand.

While market fundamentals remain generally strong, Shanghai's five- star hotels experienced a slight softening in ADR in 2007 for the first time since 2000 to record CNY 1,603.

An influx of new high-end rooms over the past three years has put some downward pressure on occupancy levels and this is not expected to abate until mid-2009.

The majority of new properties are under construction in Lujiazui Central Financial District (Pudong), Jing'an and Huangpu districts, while some properties are also under construction in satellite areas.

Source: Jones Lang LaSalle Hotels - Asia Overview Digest 2008

SHANGHAI CITY ARRIVALS

3M 4M4M

4M4M

2M

4M6M 6M 7M

6M

3M2004

2005

2006

2007

2008

2009 (July)

Source: Shanghai Municipal Tourism Administrative Commission

Foreign Total (not including Domestic)

Domestic Flights Capacity to ShanghaiDomestic Flights Capacity to ShanghaiDomestic Flights Capacity to Shanghai

Origin Airline Company Frequency Per Week

Dayong Eastern Airlines 15

Fuzhou Eastern Airlines 31

Guangzhou Eastern Airlines 45

Guilin Eastern Airlines 14

Haikou Eastern Airlines 21

Hefei Eastern Airlines 23

Huhehaote Eastern Airlines 7

Jinan Eastern Airlines 12

Kunming Eastern Airlines 44

Nanchang Eastern Airlines 29

Qingdao Eastern Airlines 27

Shenzhen Eastern Airlines 53

Xiamen Eastern Airlines 45

Wuhan Eastern Airlines 33

Yantai Eastern Airlines 21

Wuyishan Eastern Airlines 7

Chengdu International Airlines 35

Chongqing International Airlines 21

Guiyang International Airlines 12

Beijing Shanghai Airlines 49

Haerbin Shanghai Airlines 14

Xian Shanghai Airlines 28

Changsha Southern Airlines 14

Changchun Southern Airlines 17

Dalian Southern Airlines 31

Sanya Southern Airlines 17

Shantou Southern Airlines 17

Shenyang Southern Airlines 22

704

International Flights Capacity to ShanghaiInternational Flights Capacity to ShanghaiInternational Flights Capacity to Shanghai

Origin Airline Company Frequency Per Week

London England Airlines 5

Milan International Airlines 9

Rome International Airlines 2

Paris Eastern Airlines 14

Moscow Eastern Airlines 4

Frankfurt International Airlines 7

Vienna Austrian Airlines 14

Vancouver Eastern Airlines 3

Los Angeles Eastern Airlines 7

Sydney International Airlines 5

Melbourne Eastern Airlines 3

Hong Kong Eastern Airlines 105

Macao Shanghai Airlines 14

Singapore Eastern Airlines 21

Bangkok Eastern Airlines 14

Tokyo Eastern Airlines 21

Osaka Eastern Airlines 26

Seoul Eastern Airlines 30

304

Market Analysis

Significant setbacks in travel from the largest source markets Japan and Korea, reflecting the impact of the financial crisis on these two countries.

Travel from Japan recorded the largest decline, down by 54,292 overnight visitors, 19% less when compared to the first quarter of 2008.

Arrivals from Korea dropped by 36,321 overnight visitors, down by 25%.

Visitation from the rest of Asia saw only a relatively modest contraction, at 1.6% on average, with Thailand and Indonesia actually showing positive growth by 19% and 2% respectively.

Americas and Europe generated significantly less overnight visitors when compared to first quarter of 2008, down by 14% and 17% respectively.

Source: Cushman & Wakefield - Shanghai Hospitality Report

MarketSupply

5-star hotel supply has been growing rapidly in Shanghai over the last decade.In the year 2000, there were less than 10,000 5-star rated hotel rooms in the Shanghai market, however by the end of 2008 that number grew to more than 25,000 rooms representing a compound average annual growth rate of approximately 13.4%, most of which were added to the Central Business District.Several major projects in the Shanghai CBD area have been postponed, the number of 5-star rated hotel rooms in the city is still set to increase to more than 40,000 by the end of 2012.Source: Cushman & Wakefield - Shanghai Hospitality Report

Market PerformanceBetween years ending March 2008 and 2009, market-wide average occupancy of Shanghai’s 5-star hotels declined by 10.7-percentage points from 67.7% to 57%.Pressured by falling occupancies, hoteliers resorted to discounting, with market-wide average room rate declining by 14.1%, from CNY 1,380 to CNY 1,185. Both negative trends combined resulted in a significant overall drop in average RevPAR by 27.3%, from CNY 935 to CNY 675 between YE March 2008 and 2009.The most significant decline was recorded in the first quarter of 2009, when Shanghai 5-star hotels experienced an alarming 40.3% drop in RevPAR, plummeting to CNY 447 compared to CNY 749 in Q1 2008. This negative trend has been experienced across all sub-markets in Shanghai.Source: Cushman & Wakefield - Shanghai Hospitality Report

HOTEL PERFORMANCESource: International Branded Hotels of Shanghai (IBHS)

Y500

Y1,000

Y1,500

2006

2007

2008

2009 (July)

RevPAR ADR

OCCUPANCYSource: International Branded Hotels of Shanghai (IBHS)

0%

35%

70%

2006

2007

2008

2009 (July)

Market Analysis

Source: hotel investment and advisory firm Jones Lang LaSalle Hotels in its Hotel Intelligence Report 2009, research based on a sample of more than 9,700 guest rooms..

The average daily room rate of the city's luxury hotels dropped 24 percent year on year to CNY 1,225(US$180) in the first five months while the occupancy rate dropped 14 percentage points to 45%.

“The weakened global economy and the consequently tightened travel budgets have dramatically affected overseas tourist arrivals to Shanghai,” said Andreas Flaig, managing director with Jones Lang LaSalle Hotels China. "As a result, the city's five-star hotels have started to significantly lower their room rates in a hope to bolster the dwindling occupancy rates.''

Overseas tourist arrivals in Shanghai fell 6.2% year on year to 2.04 million between January and May.

The global economic crisis began to have a major effect on the local market in the second half of last year.

2008, the average daily room rate at Shanghai's five-star hotels fell 4% to CNY 1,552 while occupancy rates dropped 10 percentage points to 56%.

World Expo PreparationCurrently there are more than 230 countries / organizations have confirmed their participation.As one of China’s commitment when it bid for the event, room accommodation will be arranged by respective country/organization/participant at their own desecration.6 hotels located in the World Expo Village will be the main host/official appointed hotel:

InterContinental Hotel (400 rooms, owned by World Expo Bureau)http://www.ichotelsgroup.com/intercontinental/en/gb/new-hotels/shanghai-expoJin Jiang Group Service Apartment (914 rooms)Donghu Service Apartment (816 rooms)3 economy hotels.

The balance for room shortage, it will be replenished through either service apartment or economy hotel within 20 minutes away from the Expo site.Other than that, it also needs to be prepared rooms for temporary visit for the respective country senior government officer who comes to their country pavilion for celebration of own National Day.Reservations Centre has been set up for the above case.All related software and hardware is sponsored by the HUBS1 - http://www.hubs1.net/en/index_en.asp

TicketOfficial partners - China Mobile, China Telecom, Bank of Communications, China Post are also the only authorized ticket agent.Currently there are 24 approved travel agencies authorized as the ticket agent, however the ticket must be packaged together with either flight or rooms.(travel agents listed on next slide)

i.e. - 6 days/5 nights for east China travel, incl. Expo site visit, etc.more authorized agents to come soon.

Province / City Name of Travel Agency / Telephone

Beijing CITS HO / Tel. 4006008888

Shan Xi Province Shan Xi Business International Travel / Tel. 0351－5278652

Inner Mongolia CTS, Inner Mongolia / Tel. 0471－6281554

Jilin Province CYTS, Jilin Province / Tel. 0431－88529006

CTI Shanghai/ Tel. 021－62998278

Spring Travel Shanghai / Tel. 021－62520000

Shanghai Shanghai Airlines Travel / Tel. 021-62121029

Shanghai Tour Bus Center(SSBC) / Tel. 021－64265555

Shanghai Jingjiang Travel / Tel. 8008208286

Jiangsu ProvinceCTS Wuxi / Tel. 4008860077

Jiangsu ProvinceJiangsu Overseas Travel / Tel. 4008284008

Zhejiang ProvinceCTS Zhejiang / Tel. 0571－87553583

Zhejiang ProvinceZhelun Overseas, Ningbo / Tel. 0574－87733098

Anhui Province CYTS Anhui/ Tel. 0551－4296688

Fujian Province CTS Fujian / Tel. 0591－88371688

Henan Province Tourism Group Henan / Tel. 0371-68262878

Guangxi Province CTS Guangxi / Tel. 0771-2630616

Hainan Province CTS Hainan / Tel. 0898－66782882

Chongqing Overseas Travel Chingqing / Tel. 4008899922

Tibet Tibet Tourism Travel HO / Tel. 0891－6836626

Shanxi Province CTS Shanxi / Tel. 029-82403537

Yunan Province CITS Kunming / Tel. 0871-3566600

Gansu Province Comfort International Travel, Gansu / Tel. 0931-8725292

Ningxia Province CITS, Ningxia / Tel. 0951-6719795