Following several years of downturn in the hospitality industry, the Hang Lung Group is focusing on more lucrative prospects.
The group is shutting the doors on its Grand Plaza Hotel in Quarry Bay and reopening it as serviced apartments under the name Grand Plaza Apartments.
Change seems to have been in the air for some time, the hotel having some rooms with kitchenettes available from the day it opened in 1988. During a refit in 1991, 100 of the hotel's 498 rooms were turned into apartments, bringing the total number of rooms with kitchenettes to 242.
The transition was completed in January when a company restructuring saw all the rooms being rebranded as Grand Plaza apartments, with a major renovation to begin this summer.
The projected return under the new format is 7.1 per cent, which the company describes as 'much better than from the hotel business'.
Reasons for the change lie in the Asian financial crisis of the late 1990s, the September 11 attack in New York, and the 'changing travel characteristics of Hong Kong's primary tourist markets', says executive director Terry Ng Sze-yuen.
'These factors impacted on all aspects of the hotel business,' he says. 'Grand Plaza Hotel, like most participants in Hong Kong's hospitality industry, has continued to face difficult times since mid-1997.'