Ritz Carlton finds there is room at top in Hong Kong

HONG KONG'S plush Ritz Carlton is here to stay, the hotel's president and chief operating officer, Horst Schulze, said yesterday.

Contrary to resurgent rumours that the property would be torn down and redeveloped into an office block, Mr Schulze said that the group had been given a multi-year contract to run the hotel.

''Not only have we been given an assurance by the owners that the property will stay as a hotel, we have been given a multi-year contract to run the hotel,'' said Mr Schulze.

Mr Schulze, however, declined to disclose the duration of the group's management contract in Hong Kong.

The Ritz Carlton was the talk of the town long before its doors opened when its initial owners, Ginzu Golf Service, went into receivership and the property was put up for sale in June, 1992.

Almost a year later, a consortium led by Lai Sun Development took over the property for slightly less than $1.2 billion. The hotel finally opened on August 15 last year.

Mr Schulze said the owners were happy with the operating results of the hotel, which achieved about 70 per cent average room occupancy in its first year of operation.

''For a new hotel, that is excellent,'' he said.

Mr Schulze said the Hong Kong property was extremely important to the international group because it was the Ritz's first property in Asia, helping to create brand awareness in the region.

''While we are well known in the US and in Europe, the brand awareness is not as high in Asia,'' he said.

As a deluxe hotel operator, Mr Schulze admitted that negotiations for a management contract with the group tended to be complex, because the group had a high criteria for hotels which used the Ritz's name.

''It is a bit difficult having a deal done with us, as we have a high criteria and consequently a higher investment is required from developers,'' he said.

However, if developers understood the demands of its market, an agreement could be concluded quickly, he said.

He said the group would not compromise on the standards it set for the Ritz's name as these standards were ultimately set by customers.

''We cannot compromise on the standard as it would mean compromising our customers as well as existing investors who have established properties according to the set criteria,'' he said, adding that the group's customers comprised the top five per cent of the market.

This high standard has apparently not deterred investors or developers from approaching the group.

To date, the group has clinched contracts to manage hotels in Jakarta, Kuala Lumpur, Singapore, Seoul, Tokyo and Osaka.

The Seoul property is scheduled to open in November.

Less than three years ago, the hotel group had no properties in the region.

The recent trend of hotel owners managing their own properties in Asia has failed to waver the group's faith in the region.

''Today's traveller is a worldwide traveller and is not limited to travelling in the region. You cannot compete for that particular worldwide traveller if you are an independently managed hotel.

''You need a company which has the marketing reach to find that international traveller,'' he said.

He said than it was extremely difficult for an independent small company without international marketing networks and reservation systems to compete for the international traveller.

''Consequently, many individual hotels are looking for connections with international brands.

''That's what I see clearly now, because we have a number of people approaching us for the takeover of hotels,'' he said.

He said that his group has been approached by individual operators in Asia, the US and Europe.