SHANGHAI - GLOBAL travel may be ailing, but China's biggest city of Shanghai is pursuing luxury travellers with a vengeance, bent on restoring a reputation for opulence and elegance that once made it the Paris of the Orient.

As it spruces up for next year's six-month-long World Expo, the metropolis of US$20 million (S$29.1 million) is transforming itself from a gritty industrial hub of crammed tenements into a showcase of glittering skyscrapers, quaint but quiet alleyways and meticulously landscaped parks.

A complete makeover of the legendary Peace Hotel, which sits astride the city's riverside Bund, is one of scores of projects aimed at packaging the city's Western colonial style heritage for upscale travellers.

Shanghai may not be the first name that pops into mind when it comes to elite travel destinations, but luxury tour operators are flagging it as a choice option, especially for shopping and gourmet dining.

A new cruise liner terminal is now a regular stop for deluxe Yangtze River tours; a recently opened Peninsula Hotel and the Hyatt on the Bund, both nearby, offering stunning views of the Huangpu River and the Bund's majestic colonial architecture.

Just a few years ago, that would have been hard to believe. But key parts of the city have been transformed by a craze for upscale urban renewal, encouraged by authorities keen to boost real estate prices and lure wealthy investors, both foreign and domestic.

Freshly renovated art deco masterpieces and colonial-style villas in the leafy former French concession house sidewalk cafes, luxury boutique hotels and elegant restaurants, including one run by renowned chef Jean-Georges Vongerichten.

Add to that fashion shows, Formula One racing, art shows and other events catering to the well-to-do.

Shanghai's planners expect 70 million visitors to next year's Expo, to be held in waterfront plazas. And then there is the domestic crowd: his last count put the number of mainland Chinese worth more than US$1.3 million at 825,000. Among them, at least 116,000 lived in Shanghai.

So far the news for travel this year, luxury or otherwise, is discouraging. Shanghai's tourism arrivals were down about 11 per cent from January-April from the year before, while hotel occupancy rates averaged only 46 per cent, down about 10 percentage points from a year earlier. -- AP