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The Hong Kong Hilton

Opened in 1961, the Hong Kong Hilton closed its doors in 1994 to make way for redevelopment of its site into commercial office space. The hotel was closed not because it was unsuccessful or losing money, however. Instead, the decision to close was based on the simple fact that its owner could achieve a higher return on the site from a commercial building than from a hotel. Several factors entered into the decision of Hutchison Whampoa to demolish the landmark property. Among them were the increasing cost of labor, a requirement for retrofitting hotels for sprinklers, zoning restrictions, and the general cost of real estate in central Hong Kong. The Hilton was by no means the only property removed from supply. Hong Kong lost a net of nearly 900 rooms from 1993 through 1995, even though hotel occupancies averaged above 80 percent for the period and well over 2,000 new rooms opened.