Wharf's new mainland hotel brand keeps it in the Polo family
Niccolo, named after Marco Polo's father, will seek new growth through management of luxury hotels in Wharf's flagship mainland complexes
Almost 30 years after launching its Marco Polo brand, Wharf is taking its hotel management business to the next level by launching a luxury brand to operate hotels at its mainland flagship commercial complexes.
The Niccolo brand, named after explorer-merchant Niccolo Polo, Marco Polo's father, could also consider managing the planned Murray Building hotel in Central, said Wharf deputy chairman and managing director Stephen Ng Tin-hoi.
Niccolo is expected to be the firm's new growth area on the mainland, which is experiencing a property slowdown due to sluggish economic growth and policy measures to cool the market.
Last month, Wharf chairman Peter Woo Kwong-ching said the group had reservations about investing in the mainland's residential market in the next two years because of risks from Beijing's austerity measures. But Woo had added the company would continue to look for long-term projects all the same.
Expanding the hotel management business is seen as a long-term investment even though the mainland's high-end hotel market is getting competitive, Ng said in an interview with the South China Morning Post.
Ng said the company has been interested in entering the luxury hotel management business since the group's inception in 1986. But since Marco Polo hotels are linked with Harbour City in Tsim Sha Tsui, it limits the hotels' redevelopment potential.
"As we are building new hotels in China, it provides us more flexibility to upgrade the [hotel] products," said Ng.
Niccolo and existing Marco Polo brands will be under Wharf's wholly owned subsidiary, Marco Polo Hotels.
Ng said hotel assets - in Hong Kong and the mainland - amounted to about HK$30 billion, roughly a tenth of the group's total assets.
Niccolo will be a chain of luxury hotels. The first Niccolo hotel will open in the first quarter of next year within the newly opened International Finance Square (IFS) Chengdu in Sichuan province. Targeted customers are chief executives and the non-corporate affluent.
"I do not worry about occupancy," said Ng, describing the group's hospitality arm as a captive business that would draw customers from luxury buyers at its high-end shopping centre, and from office buildings in its Chengdu IFS development.
The brand will also run three other hotels in the group's International Finance Square complexes in Chongqing, Suzhou and Changsha.
In the longer term, it will aim to manage other hotels not owned by Wharf, said Ng.
According to consultant JLL, mainland hotels are experiencing a general slowdown following Beijing's crackdown on conspicuous consumption.