FUELLED by the rising number of tourists and world-class events, Shanghai's hotel sector is experiencing a boom, a report from Jones Lang LaSalle shows.

The five-star hotels in Shanghai achieved an average occupancy of 80 per cent with average room rates exceeding US$170 in 2004, according to Jones Lang LaSalle Hotels China, a hotel investment services group.

"Shanghai's room rate level for the first quarter of 2005 stands at US$190, more than double the rate in Singapore or Bangkok," said Michael Chin, executive vice-president of Jones Lang LaSalle Hotels China.

"The continued growth of the Shanghai economy and tourism sector will remain a key driver for boosting lodging demand in the future," Chin said.

Shanghai attracted a record high of 3.9 million visitors in 2004, up 57.5 per cent over the SARS-affected 2003 and 41.4 per cent over 2002, the report revealed.

The development of world-class events and attractions, such as the Formula One Grand Prix and World Expo 2010 are additional forces that propel upper-tier lodging demand, Chin said.

The Shanghai Tourism Committee predicted that 70 million tourists, both domestic and international, will visit Shanghai during the 2010 World Expo and 400,000 tourists per day will visit the city during the peak period.

"More than 7,000 new rooms, mostly in four- and five-star hotels, are expected to be added in Shanghai between 2005 and 2008," Chin said.

More than 20 upper-tier hotels are under construction in the city.