Billionaire Fong Yun Wah, the leader of the real estate company Hip Shing Hong, plans to make its debut in Hong Kong’s thriving hotel industry in the fourth quarter of this year.
The schedule is to open an 88-room boutique hotel “inspired by nature” in Hong Kong’s Jordan district, adding to an empire that includes service apartments, commercial real estate and residential projects.The World Travel & Tourism Council, an industry group, says Asia’s travel economy will grow by 4.2% annually in the next decade. The country has in the past decade spawned its own hotel and travel businesses with multi-billion-dollar market capitalizations. Fong Yun Wah knows the city particularly well even the company will face larger global rivals in the industry. Since arriving from the mainland in 1927, Fong Shu Cheun started out in business with a sesame factory. After the devastation of World War II, they entered in the international trading business with imports of cinnamon and sesame from China and exports to the U.S. In 1951, Hip Shing Hong was the largest cinnamon exporter in Hong Kong. It entered the real estate business in 1953 with the purchase of a plot of land at Wong Chuk Hang Road. Earlier this month, following a big run-up in Hong Kong real estate prices recently, Forbes ranked Fong no. 1,057 on the new 2011 Forbes Billionaires List with wealth of $1.1 billion.
Recently, Hip Shing Hong managing director David Fong said a stiff tax on real estate imposed by the government at the end of last year was necessary due to pressure from local residents worried that they are being priced out of the local market. “It may dampen prices of property in the short-term,” said David, the son of the chairman. “But it’s needed. The government had to do something,” He also expressed optimism that Hong Kong’s overall recovery will continue this year.
One reason that Hong Kong will continue to do well in industries that are affected by to its underlying economic strengths – the rule of law, relatively good corporate governance standards, and transparency. “As long as Hong Kong upholds its good values, we’ll do well,” David said. Hong Kong would be benefit more from “good money chasing good assets,” compared with sharper inflows of speculative investment, he said.