Ho’s Shun Tak Holdings to develop CitizenM hotels in Australia

Shun Tak Holdings has signed a deal with Dutch boutique hotel chain CitizenM to develop hotels in Australian cities.

Shun Tak Holding managing director Pansy Ho.

Hong Kong’s Shun Tak Holdings has signed a deal with Dutch boutique hotel chain CitizenM to ­develop and manage multiple hotel properties in several Australian cities.

The listed Shun Tak Holdings, controlled by Pansy Ho, daughter of multi-billionaire gaming tycoon Stanley Ho, is attracted to CitizenM, which has hotels in ­Europe, Asia and America, because the brand is oriented towards the youth market.

Founded by Rattan Chadha, the former owner of the Mexx International Fashion Company, CitizenM offers affordable luxury including extra large beds, free WiFi and movies on demand.

“We want to bring this brand now to Asia, so we have done the research and I believe there are few markets more conducive to that type of marketplace (than) Australia,” Ms Ho told The Australian.

“From where I sit, which is to operate some of the non-gaming components of the family businesses, we are in fact interested in hotel management and hotel ownership and we are starting to look at Australia.

“I think obviously we have to start where there is the critical mass, so I think Sydney, Melbourne and Perth will likely be the kind of natural selection,” said Ms Ho, who was attending the World Travel & Tourism Council conference in Bangkok.

“We are partnering with CitizenM, we are their Asian partner,” she said.

Ms Ho, who has been at the helm of the listed Shun Tak Holdings since 1999, wants to own and operate the hotels but did not rule out partnering with other real estate developers to build the boutique hotels.

Amsterdam’s CitizenM Hotels has been looking for a foothold in Sydney, Melbourne and Perth for at least the past 12 months.

CitizenM chief operations officer Michael Levie has more than 4000 hotel rooms coming on line in Europe, North America and China, and he told The Australian last year that there were plenty of development opportunities in Australia and he was keen to create a cluster of hotels.

Created in 2007, CitizenM offers “affordable luxury” and is priced at up to 25 per cent below high-end four-star hotels.

“We have found CitizenM ­hotels function best in metropolises. We are built for mobile citizens and people that travel frequently who are worldly, tech-savvy and social. I am not saying that Sydney and Melbourne only qualify. (But) that would be an entry. It just does not make sense for one hotel in Australia. I would say two or three would be the bare minimum, and there are great opportunities in Sydney, Melbourne and Perth.”

Mr Levie said that unlike most hotel chains, CitizenM owns and operates 9 hotels around the world.

“We almost always own and operate. We are different from the normal model. We choose a very specific niche of client and we don’t believe, like most of the industry does, that we should try to be something for everybody. It doesn’t work for us.”

CitizenM’s most profitable hotel is the original 355-room property it established at Schiphol Airport in The Netherlands. But the hotelier is also doing well with one property in New York. It is also in London and Glasgow. “We have a lot of properties under construction.”

But Mr Levie is cognisant some markets are too expensive.

“Basically some markets lock up because simply the cost of real estate versus your earning potential does not match up,” he said.

“We have run into cities that we would love to be in but are simply off limits.

“From a real estate perspective, we would be open to partnerships because real estate is a local game. Since we are a relatively small organisation I could not do four or five different deals with different developers, so we need to do it with one.”

The writer travelled to Bangkok as a guest of WTTC.