moondog

Hilton International does invest in property on a strategic basis, typically in markets they care about, but lack options. HK certainly fits this profile, but I am a little skeptical because they tend to disclose these assets in a public manner. My secondary theory is that an entity that neither Swire nor Hilton wants to be associated with has some skin in the game. Honestly, I don't know the answer.

lesteryen

Actually I have been hearing rumors that Conrad Hong Kong will be rebranded as the Fullerton Hong Kong later this year. Perhaps someone can fact check to see if the rumor is true. The remaining 80% shares of the hotel is owned by the Sino Group (https://www.sino.com/en/our-business...rad-hong-kong/) who owns the Fullerton brand.

lsquare

That's terrible if true.

khabah

There was a Fullerton property announced for Ocean Park last July with an opening mooted for 2021, while this article from August specifically mentions The Fullerton Ocean Park Hong Kong.

khabah

moondog

Why is it terrible to have a lower priced option at Pacific Place than the SL, UH, or current Conrad? I thought we were supposed to embrace competition, and especially small players.

anabolism

It seems Swire also owns 20% of the other Pacific Place hotels, JW Marriott and Shangri-La.

evergrn

I thought Swire owned the Pacific Place complex (including all of Conrad, Shang, JWM), but I guess I was wrong. Didn’t know it was only 20% ownership.

Anyways, I’d be surprised if Conrad’s thinking about renovation under these circumstances.

moondog

I didn't have a vague understanding until I saw your post, and spent 10 minutes trying to learn. While 10 minutes wouldn't be sufficient for the investment community, I think it is probably good enough for this thread.

Following are my assumptions:
-Swire owns ~40% of PP on paper
-but, when you consider the fact that it also has minority stakes in the hotels, maybe we can put the true number at ~60%
-as anchor tenants, and equity holders, the hotels are more important than Starbucks, but it would foolish to count out the value of Starbucks in the grand scheme
-the SL and Conrad are an easy comparison because they are the exact same in terms of physical plant
-this will continue to be the case after Conrad rebrands
-I'm guessing that Fullerton is going to price itself at 20% less than the SL
-it could go in the other direction, and invest $100 million on renovations in order to fetch 20% more than the SL, but the odds of this are pretty low
-Swire won't care as long as the rent is paid

evergrn

I don't know if Conrad HKG is Hilton-managed or franchise.
But either way, isn't the hotel locked into a multi-year contract? Such things are not usually year-to-year, correct?
If that's the case, then Conrad HKG wouldn't be able to just rebrand unless it happens to be at the end of the contract.
Does anyone know how that works? Like someone said upthread, I too would hate to see the Conrad rebranded.

anabolism

You accept as a given that the Conrad Hong Kong will rebrand. Upthread it was reported as a rumor. Does anyone know anything more concrete about this? Or even the source of the rumor, if nothing else?

teemuflyer

The rumormonger..

hfly

This is silly. That Sino owns 80% means nothing? If one looks at the top 20 hotels in Hong Kong or any major city pretty much anywhere one tends to find similar owners, i.e. corporate or investment groups. AFAIK SIno has has a big chunk for some time, and yes they also own the Fullerton in Singapore (and now Sydney), they also own majorities of several other hotels in HK, any of which they could make a Hilton if they chose to. Like many of Swire's projects, Swire often dilutes themselves down from majority to sometimes controlling, sometimes not, in any case they built/maintain and run Pacific Place overall.

Even if true, I have very fond memories of the Hilton Hong Kong......which was ultimately owned by Li Kashing. One day he decided that he wanted to build a bigger better building on that site, he bought out the rest of his deal with Hilton and knocked the hotel down, and a few years later we had the Conrad instead. If that were to happen again (which I doubt) maybe we might see finally a dozen Hilton properties in HK, rather than just a high end one on the island, and a low end one in Mongkok.

MaldivesFreak

Exactly!

moa999

The issue for this franchised model (particularly in Asia) is the partners (often large Asian conglomerates) are gradually developing their own hotel chains, and deflagging the international chains.
For example losses by Hilton and Starwood in Australia over the last 15 years.

Hilton SW Melbourne - Pan Pacific 2017
Hilton on the Park Melbourne - Pullman 2015
Hilton Melbourne Airport - Parkroyal 2010
Westin Sydney - Fullerton 2019
W Sydney - Taj 2007 - Ovolo 2014

moondog

Reflags from one established management group to another are also more common in Asia than elsewhere.