Hong Kong Sees New Wave Of Hotel Development

Hong Kong's two newest upscale hotels designed for business travelers, the Langham Place and Le Meridien Cyberport, are in parts of the sprawling city previously not known for high-end hotel development. In addition, a Four Seasons Hotel is rising at the top of a new high-profile office tower in the heart of Hong Kong's financial district and the Grand Hyatt, an established Hong Kong property overlooking Victoria Harbor, this spring introduced a hotel-within-a-hotel, called Plateau.

The wave of activity comes on the tail of a three-year drop in international travel following the 2001 terrorist attacks, a worldwide recession, the outbreak of severe acute respiratory syndrome and the war in Iraq.

"With all of that finally behind us, we're glad to welcome back individual travelers, as well as meetings and incentive programs that have been attracted to our city in the past," said Clara Chong, executive director of the Hong Kong Tourist Board. Chong said that through April the percentage of U.S. visitors jumped 33.8 percent, compared with the same period in 2003. At upper upscale and deluxe hotels, where most international travelers tend to stay, occupancy in April reached 79 percent. Monthly average daily rate was up 32.9 percent.

In its second-quarter earnings release last month, Marriott International also noted an improved business picture for Asia. "These properties generated significantly higher sales and profits in the quarter due to higher traveler demand from around the world," said chairman and CEO J.W. Marriott Jr. Marriott operates both a deluxe Ritz-Carlton and an upper upscale J.W. Marriott in Hong Kong.

"Local hotel companies are doing very well, including those at the deluxe price point," acknowledged James Lu, executive director of the Hong Kong Hotels Association, citing Park Hotels and Royal Garden Hotels as examples.

As a result of restrictions recently lifted by the People's Republic of China, a record number of regional travelers also are expected to visit Hong Kong this year. "Local business travelers bring the same expectations regarding service and amenities as global travelers," Lu said. "Considering the rates being charged at this price point, travelers' high expectations are understandable."

The 665-room, 42-story Langham Place Hotel, which opened this month, is located in the Mongkok district of Kowloon Island across Victoria Harbor from Hong Kong Island. "It's the first upscale high-rise hotel development in the area," said Jorgen Christensen, director of sales and marketing.

The hotel is one component in a multi-use project that includes offices and retail. Wireless high-speed Internet access is available throughout the building. One of the three telephones in each guest room is a mobile phone, which can be used anywhere on the premises. Meeting space includes a ballroom, five breakout rooms and a rooftop space with sweeping views of the city that is appropriate for private meal functions.

The 173-room Le Meridien Cyberport, which opened in April, is part of a new futuristic technology campus under construction on the south side of Hong Kong Island. For the office component, the developers are seeking companies that are tech related. Residential and retail components complete the plan.

Given its setting, this hotel too emphasizes in-room technology for the benefit of business travelers. "Guest rooms, for example, feature 42-inch plasma screen televisions, which can be used for a wireless Internet connection," said director of business development Jolanta Annunen.

When the approximately 400-room Four Seasons opens in the third quarter of 2005, it will be at the top of the new International Finance Centre complex in downtown Hong Kong Island. Four Seasons had managed The Regent Hong Kong, overlooking the harbor from Kowloon Island, until that hotel was sold to InterContinental Hotels Group in 2001 and rebranded. "We had been looking to have a flag in Hong Kong because it's one of the world's great destinations and our mandate is to have a hotel in any location our frequent guests are likely to visit," said Wolf Hengst, Four Seasons president of operations.

The Four Seasons project also includes offices and retail space in two towers—the hotel tower and one containing serviced apartments that Four Seasons will manage. "Almost all of the new developments are structured as mix-use developments," said the hotel association's Lu. "Hotels no longer are just standalone products. From a developer's point of view, in order to secure financing, you have to create an environment where just about everything is provided. If there is enough commercial activity in the area where the hotel is situated, you potentially can have 60 percent to 70 percent of your occupancy assured the day you open."

The 556-room Grand Hyatt in May refurbished and repositioned a floor of the hotel, consisting of 23 deluxe guest rooms, as Plateau. "What makes Plateau innovative isn't that it resembles an executive floor or club floor, which many hotels offer. Rather, it's the connection to spa facilities with services available right in a private guest room, not just booked for an hour or two, but the room the guest actually stays in," said John Wallis, Hyatt International senior vice president of marketing.

Plateau also has its own restaurant and meeting room. Wallis said that, depending on the response to the concept in Hong Kong, Hyatt was considering adding other spa room floors in other destinations, most likely starting in Asia. Hyatt also operates a Hyatt Regency in Hong Kong.