Hong Kong-based property investment firm SEA Holdings plans to redevelop the eight-year-old Causeway Bay Crowne Plaza. If the Town Planning Board approves the application, SEA Holdings will demolish the five-star hotel to rebuild it as 22-story office complex.
While some see this as a smart investment move, others foresee many issues for the already congested Hong Kong commercial district.
According to the Federation of Hong Kong Hotel Owners ED Michael Li Hon-shing, an office tower is cheaper to manage and could generate more revenue than a hotel. “The hotel sector needs to constantly lower room rates in order to maintain an occupancy rate of 80 percent,” he said in a statement. “The rates are the same today as they were 10 years ago. In Macau, there are plenty of hotels charging well over HK$2,000 per night, but many hotels in Hong Kong are struggling to charge this amount even when they’re in pretty good locations.”
Occupancy rates at the hotel have reportedly ranged between 80 and 90 percent, and have sometimes reached 100 percent. Also, the management contract with the InterContinental Hotels Group does not end until 2019.
Ricky Lau, DMD of international property consulting firm Savills, explained in a statement that the site was “quite small” and would make it “difficult to build a major commercial building.” He added, “It is true that there is a strong demand for office space in Causeway Bay.” However, the site is “not a prime location for commercial space in the area.”
SEA claimed that receiving approval for the redevelopment “would not set an undesirable precedent.”
However, local residents, like Wan Chai district councilor Clarisse Yeung Seut-ying, argued it would trigger even more redevelopment in the area, worsening the traffic and harming the environment.