Shanghai luxury hotels on a creaky stairway

SHANGHAI: Luxury hotels in Shanghai appear headed for tougher climes as they grapple with low occupancy, fierce competition and recession winds.

The International Branded Hotels Shanghai (IBHS), which has 65 top hotels in the city as members, said average occupancy rate among its members fell by 11 percent in 2008, to 56 percent from a year ago.

"Occupancy in January and February this year, which is normally quiet for Shanghai, has been worse than expected," said William Hall, chairman, IBHS.