Hong Kong's Shamrock Hotel, the favourite haunt of Bruce Lee's family during the 1950s, will close after almost seven decades in business, bowing to a recession in the city that is leaving two in every three hotel rooms empty.
The nine-storey hotel, located on the corner of Bowring and Nathan roads near the Jordan subway station in Kowloon, will shut on June 14, according to staff contacted by South China Morning Post.
With 160 rooms, the four-star hotel may need to take a 40-per cent discount in its valuation, after failing to find a buyer when it was first put on the market in 2018 for HK$3 billion (US$387 million), valuers said.
"It is not easy to find a buyer at this moment, particularly for a [non-operating] hotel," said Vincent Cheung of Vincorn Consulting, who values the property at HK$1.8 billion. Both office and hotel market are suffering from plunging rates. The best the owner or the new buyer could do is to turn the building into a block of service apartments."
Hong Kong hotels were the biggest losers in Asia's hospitality industry in the first-quarter, as travel bans and lock-down orders to contain the global coronavirus pandemic kept business travellers and tourists away, hitting the financial hub particularly hard. Average nightly room rate across all categories of hotels plunged 41.5 per cent in the city to HK$865 (US$111.6) during the first quarter, as an estimated two-thirds of rooms across the city sat empty, according to Colliers' Asia Hotel report.
An undated image of Shamrock Hotel, which opened for business in 1952 on Nathan Road in Jordan. Photo: FACEBOOK.
The coronavirus pandemic, which sickened 1,100 people and claimed four lives in Hong Kong at the latest count, has added to the business woes of a city that is already in its deepest recession in decades. Thousands of events, shows, exhibitions from Art Basel's contemporary art expo to Standard Chartered's Hong Kong Marathon had been cancelled amid the outbreak, leaving hotel operators to watch in dismay as their rooms sit empty.
As few as 4,100 visitors arrived in Hong Kong in April, compared with 5.57 million in the same month a year earlier, according to data by the city's Tourism Board.
The Shamrock was among a handful of establishments owned by local Chinese hoteliers in colonial Hong Kong when it first opened in 1952. Its ground-floor restaurant and cafe on the top floor were popular among local celebrities and residents.
Bruce Lee, in his early teens when the hotel opened, used to enjoy afternoon tea at the restaurant, and had posed for photos from his family home across Nathan Road with the Shamrock in the background. The ground-level restaurant of the hotel shut in 2015. A room at the hotel now costs HK$400 a night, inclusive of breakfast and lunch.
The hotel sits on a 9,000 square-foot site that can yield about 70,000 sq ft of usable space with the potential to offer up to 108,000 sq ft (10,033 square metres) of space through redevelopment, valuers said.
An undated photo of a teenage Bruce Lee with the Shamrock Hotel in the background. The nine-storey hotel at 223 Nathan Road is across the road from the Lee family's home at 218 Nathan Road during the 1950s. Photo: Hong Kong Heritages Facebook
The owners of the site, descendants of the late hotel magnate Hui Yeung-shing, have not made up their minds whether they should sell the asset or find new tenants, according to sales agents. The Park Hotel in Tsim Sha Tsui, another Hui family holding, was sold in 2012 to local real estate billionaire Law Kar-po for HK$520 million.
Several landmark and historical hotels in Hong Kong have made way for redevelopment in recent years. The Excelsior in Causeway Bay closed its doors last year to make way for a six-year, US$650 million redevelopment by its owner Jardine Matheson to turn into a 26-storey grade A office block.
The InterContinental hotel on the Tsim Sha Tsui waterfront closed its doors in April to make way for a facelift.
"Our hotel business in Hong Kong were always good, for the last five years with average occupancy rate at 90 until last June, said Kenneth Gaw, president of the hotel's owner Gaw Capital. "The occupancy rate dropped to 50 per cent after the social movement hit the city and further plunge to single digit after pandemic outbreak. We meant to start the renovation of our InterContinental early next year, but we decided to do it early given the market condition."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.