[hkskyline]

Early farewell for a five-star favourite hotel
13 January 2008
South China Morning Post

With just 216 rooms and no ballroom to host major functions, the Ritz-Carlton is one of the smallest five-star hotels in Hong Kong.

Unfortunately, at 6pm on February 1, the hotel will be no more. A victim of the booming market for prime office space, the hotel will close just 15 years after opening - destined, it turned out, to face crisis after crisis.

Owner Lai Sun Development is replacing it with an office tower. The Ritz-Carlton will re-emerge in two years, across the harbour at West Kowloon's International Commerce Centre (ICC), and in Macau.

"The purpose of the closure is economics," Mr Lettenbichler said. "The hotel was not supposed to close until the end of 2009, when it moves to Kowloon. But with the interest in office space, investors looked at the site and saw the business model and the money that can be made by making it an office tower.

"In Central throughout the years, we've seen the Hilton go, the Furama and now the Ritz-Carlton. Yes, there seems to be a little bit of a void in hotel rooms in Central. But I think economics and business sense have taken over as far as office space goes, which is unfortunate. But that's the reality of today."

When Mr Lettenbichler took over the reins at the hotel in September 1998, its future was already uncertain.

"There was a lot of scepticism in the market," he said. "I know when I arrived, everyone was saying the hotel was going to close tomorrow or be torn down tomorrow. Many rumours in the community started when the hotel was to open but was delayed.

"I told the ladies and gentlemen of the hotel to concentrate on what we can control and not worry about what's being said in the market, or we'll go crazy every day. That's what we did."

In July 1991, Ginzu Golf Service, the Tokyo-based real estate company that owned the hotel, collapsed and went into receivership. This sparked speculation that the hotel would be sold off. After wrangling over the price - with figures around HK$1.6 billion cited at one stage - Diamond String, a Lai Sun-led consortium, agreed in May1993 to buy it for almost HK$1.2 billion.

As the guests started coming, Hong Kong was hit by the Asian financial crisis, then flak from the September 11 attacks and Sars.

"I remember that evening of September 11 because we had a reception at the presidential suite for our top customers, as well as people from the US consulate," Mr Lettenbichler said.

As the hotel prepares to close, almost all the staff have found jobs with Ritz-Carlton elsewhere, particularly on the mainland, or with other hotels.

Mr Lettenbichler will oversee the opening of new Ritz-Carlton hotels. The ICC development will see the Ritz-Carlton occupy the top 16 floors of the tower with about 300 rooms. The signature restaurant Shanghai Shanghai, however, will move to another location in Central.

The hotel will auction off about 250 items including artwork and chandeliers in the week of February 11. In Macau, the new hotel will be at the Macau Studio City development.