The number of hotels in China has quickly increased in the past 10 years. Major cities like Shanghai and Beijing are certainly the ones that have seen the most significant increase in the number of both luxury and budget hotels. The Government of China has invested great amounts of money in the tourism industry in the past decade. Major hotel construction programs greatly increased the number of hotels and guest houses, more historic and scenic spots were renovated and opened to tourists, and professional guides and other service personnel were trained. By 2003, China had some 9,751 hotels (including both Shanghai Hotels and Beijing Hotels) and a burgeoning hospitality industry, much of it joint ventures with foreign companies. As a matter of fact, a significant number of western companies involved in the travel business have understood the great opportunity that lies within China and have set up offices in big cities like Shanghai and Beijing.

On the other hand, the improvement of domestic and international tourist transportation facilities made travel more convenient. More than 300 cities were opened to external visitors around the mid-1980s. Tourists were required to have valid visas or residence permits to visit 100 locations; the remaining locales required travel permits from public security departments. In 1985 around 1.4 million foreigners have visited China, for both business and leisure. The revenue generated by tourism in China attained nearly US$1.3 billion. Beijing was one of the cities that benefited the most out of this number, mainly because of the Olympics. Close to 100% of Beijing Hotels have been fully booked for the year 2008. A number of additional hotels, both budget and luxury, have been built to be able to respond to the extremely high demand during that year.

Other than Beijing, Shanghai has also registered a major increase in tourism. It was the largest and most developed city in the Far East during the 1930s, and remained the most developed city in Communist China. In the 1990s Shanghai again became a first class choice for tourists worldwide. The Oriental New York, as they call it, has noted an exponential increase of business investments, both foreign and local, in the past 10 years. Shanghai has a rich collection of buildings and structures of various architectural styles. It contains a perfect fusion of Eastern vs Western design. One can find old temples sitting next to high tech skyscrapers. Shanghai Hotels have doubled in the past 20 years. There are two kinds of hotels: Western-style luxury hotels catering to international business travelers, and smaller hotels for local Chinese travelers.

Nonetheless, the biggest increase was in the number of upscale hotels targeting the high class clientele. Many youth hostels and budget hotels have also appeared to welcome the lower income travelers from the mainland.

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