Mandarin Oriental gets bids for Excelsior HK as Chinese luxury travel evolves
Mandarin Oriental’s Excelsior in Hong Kong will face room-rate pressure as supply increases, and affluent Chinese travelers take long-haul flights to explore destinations beyond Hong Kong.
Mandarin Oriental International Ltd. has received interest from potential buyers of the Excelsior hotel in Hong Kong in what would be a test of the resilience of demand for the city’s commercial real-estate assets that has sent prices soaring.
There were at least five bids for the property valued at HK$30 billion (USD 3.8 billion), including a Chinese-backed consortium of Sun Hung Kai Properties Ltd. and Hysan Development Co., the Hong Kong Economic Journal reported on Saturday. Mandarin Oriental said Friday it had received offers while no decision had been taken on a sale. Sun Hung Kai and Hysan did not reply Sunday to emails seeking comment sent outside office hours.
The proposals will form the basis “for further consideration of the company’s strategic options,” according to a statement from the company. No assumption should be made regarding whether the property will or will not be sold, Mandarin Oriental said.
Hong Kong hotels will struggle to capture high-end, transient Chinese tourists amid rising new supply over the next 20 years, Bloomberg Intelligence analyst Margaret Huang said in a report in June. Hotel room prices in Hong Kong face further declines as high-end Chinese leisure travelers opt to take vacations at other Asian or long-haul destinations, Huang said, citing Mandarin Oriental among hotel operators whose revenue per room available would come under pressure.
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