Surprise plan approved to tear down Excelsior hotel after 42 years as Hong Kong landmark
Four-star hotel The Excelsior may be torn down to make way for a commercial development after 42 years as a Causeway Bay landmark.
Excelsior Hotel (BVI), a wholly owned subsidiary of luxury hotel operator Mandarin Oriental International, has secured approval to build a 26-storey commercial building over the four-storey basement at 281 Gloucester Road, the Building Department's February monthly digest released yesterday stated.
The plan would yield a total gross floor area of 684,005 square feet if Mandarin Oriental goes ahead with the redevelopment.
Alvin Lam Tsz-pun, a director at Midland Surveyors, said the proposed redevelopment would definitely enhance the site's commercial value.
"The plan is a bit of a surprise to the market," he said. "But the property is in a great location and commands an excellent sea view. Both hotel and commercial development will be sought after."
With an estimated construction cost of at least HK$5,000 per square foot, he said the redevelopment project could involve an investment of HK$3.4 billion.
The approval comes in the wake of a decline in mainland tourism that prompted more than 10,000 shops, restaurants and tourist attractions to launch a month-long campaign to revive the ailing tourism industry.
"Mainland China represents 15 per cent of room nights in 2014 - the second largest source of business," Mandarin Oriental said in its 2014 results.
Due to the Occupy Central protests, revenue per available room at the 884-room Excelsior fell 4 per cent last year to US$180 (HK$1,404). The hotel's average occupancy rate fell four percentage points to 85 per cent, according to Singapore-listed Mandarin Oriental International's annual results announcement.
Average room rates remained flat at US$212 a night, it said.
The Mandarin Oriental in Central recorded a 68 per cent average occupancy rate last year, but room rates edged up 4 per cent to US$545 a night.
"The approval of the plan does not mean that we will definitely proceed with it," said a spokeswoman for Mandarin Oriental International.
Lam said Mandarin Oriental would also consider the impact of lost income. "It will take about three to four years to tear down the hotel and construct a new commercial building on the site," he said.