Disappearing rooms leave Central short

The shrinking supply of five-star hotel accommodation in Central is threatening to stifle business in the financial district and must be reversed, hotel industry experts warn.

By the time the 216-room Ritz-Carlton closes at the end of the year, the number of hotel rooms in the district will have almost halved since the mid-1990s to about 1,100.

'If the business centre continues to be in Central and not in West Kowloon, for example, then there is a mismatch' between supply and demand, said James Lu Shien-kwai, executive director of the Hong Kong Hotels Association. 'I do believe there is room for one more hotel.' But a lack of prime sites and rising commercial rents are persuading developers to turn their backs on hotels in favour of erecting lucrative office towers. Michael Li Hon-shing, executive director of the Federation of Hong Kong Hotel Owners, said he was pessimistic about opportunities for hotel development in Central.

'We can't build a hotel on the Tamar site because that's for government use. Reclaiming land is also not possible. So there's really no more room to build hotels in Central unless you convert existing buildings. But no one is going to do that when the office market is booming,' he said.

The Ritz-Carlton will be redeveloped into a commercial office building. The Furama and Hilton hotels suffered similar fates. The business district lost 517 rooms when the Furama closed in December 2001, after 28 years, torn down to make way for AIG Tower. In May 1995 Li Ka-shing's conglomerate Hutchison Whampoa eliminated 750 rooms when it replaced the Hilton with Cheung Kong Centre office tower.

Central's major hotels include the refurbished 502-room Mandarin Oriental - down from the original 541 rooms - the 113-room Landmark Mandarin Oriental and the 399-room Four Seasons, which opened in September 2005.