Chapter 226 4 Seasons Hotel

Chapter 226 4 Seasons Hotel

Chapter 226 Four Seasons Hotel
Yang Wendong thought about it, and then asked, "Old Zheng, the Hong Kong government requires this piece of land to be used as a hotel. Is there any time limit?"

Zheng Zhijie replied: "20 years. The Hong Kong government's requirement for this piece of land is that any buyer must build and open a hotel within 2 years after purchasing it, and then operate it for 20 years.

After 20 years, the Hong Kong government will no longer be concerned about its use. It can continue to be a hotel or used for other purposes.”

"20 years! Not bad." Yang Wendong nodded.

22 years later was 1983, the lowest point in the real estate market. It was unlikely that the company would lose money after 20 years of operation. After 83, the property could be demolished and a super tower built.

If the hotel business is good, some floors of the future building can continue to be operated as hotels.

The area of ​​this land is 3.8 square feet, which is perfect for building a skyscraper. However, in the 60s, the tallest buildings were generally only 20 or so stories high. The times were not right, so we can only wait until later.

Zheng Zhijie asked again: "Mr. Yang, to bid for this piece of land, we have to submit hotel information, so we can choose to cooperate with international hotel management giants, or register a brand ourselves and operate it ourselves, what do you think?"

"We operate it ourselves." Yang Wendong said without hesitation.

International hotels generally like to cheat people, using various methods, and Yang Wendong even knows some of them.

Of course, generally speaking, these hotel brands will also make investors a little money, not out of conscience, but for the sake of sustainable cooperation with other owners.

The most important thing is that most of these collaborations last for more than 20 years. In his previous life, Mr. Li had tried his best to regain the management rights of the hotel property and had resorted to some dishonorable means. It was really because the hotel was too strong.

Zheng Zhijie asked again: "Okay, then the name of the hotel is Changxing Hotel?"

"No, this name is not good." Yang Wendong shook his head and said, "Non-civilian companies such as real estate and shipping can directly use Changxing. Although hotels are also considered part of real estate, they are mainly for ordinary customers and are considered civilian.

Let me think about it, and I'll tell you when I've come up with a name, or you can think of some names and I'll take a look."

"Okay, Mr. Yang." Zheng Zhijie agreed, "Then I will go and prepare other materials first."

"Well, when does the auction start?" Yang Wendong asked again.

Zheng Zhijie replied: "It will be in November. The Hong Kong government deliberately postponed the auction time this time, probably to attract more overseas financial groups to participate in the auction. It is estimated that the income from the land sale this time will account for a large part of the Hong Kong government's finances."

"Yes." Yang Wendong nodded: "This piece of 3.8 square feet of land is more expensive than our 850 million square feet of land in Kwun Tong."

The Hong Kong government does not impose heavy taxes, but a government naturally needs fiscal revenue, so land sales are the bulk of its revenue. However, this proportion was not large in the 60s and was far less than in the 80s.

But other taxes are basically fixed and follow economic fluctuations. When the economy is good, more is collected, and when it is bad, less is collected. Only real estate can be adjusted. The more you sell, the more money you can get.

However, in order to reap long-term profits, the Hong Kong government has a plan for releasing land. If too much land is released, the land will be worthless and it will be a loss. If too little land is released, the total income will be less. Everything has a balance.

……

In the evening, after returning home.

Yang Wendong teased his son for a while, and then told Su Yiyi about what happened in the hotel.

"3.8 square feet? On Queen's Road in Central?" After listening, Su Yiyi asked, "The bid for this piece of land must be at least or million Hong Kong dollars."

"About the same." Yang Wendong nodded and said, "The land price in Central is considered cheap. I guess it's because we can only build a hotel here, otherwise the price might be higher."

Although hotels are also capital-intensive and can generate good returns if managed well, there are restrictions after all. Many consortiums may not be interested in hotels and will naturally not participate.

Office buildings are much better. They are in greater demand and can be used to collect stable long-term rent. The money earned may not be more than that from hotels, but it is better because it involves less trouble. And if used to cash in and sell properties, office buildings are also very convenient.

"So do you want to run a hotel as well?" Su Yiyi asked again.

Yang Wendong said: "I didn't intend to open a hotel so soon, but it would be a pity if I missed such a large piece of land and lost it later."

In fact, a hotel is also part of real estate. The special thing about it is that it is considered half a "civilian commodity", just like a supermarket.

Hong Kong's existing large conglomerates, or the four major families in the future, will basically enter the hotel industry after achieving success in the real estate industry. Those who are not so successful will at least own a few hotel properties, while the most impressive ones will own hotel chain brands.

Currently, the scale of Changxing Real Estate is not small among Chinese companies. It has 9 buildings in Hong Kong Island, which are used for its own use or rented out, 4 residential communities under development, more than a dozen cinemas, and a large number of old building properties in Kwun Tong, etc.

Originally, he was thinking of building his own hotel after the scale had expanded in a few years. This way, when he wanted to meet with others to discuss matters, it would be much more convenient to have his own place.

But plans cannot keep up with changes, and he doesn't want to miss out on such a prime piece of land.

Su Yiyi asked again: "Can we afford this investment of tens of millions of dollars? We have been in a lot of debt during this period, right?"

"The debt is indeed not small, but it is not much either." Yang Wendong smiled and said, "Don't forget that Changxing Industry now has a net profit of 300 to 400 million per month. This year, the profit is at least 300 to 400 million.

Just for this factory, it wouldn't be a big problem to mortgage 100 million, and Changxing Real Estate itself has gradually become profitable."

As the cash cow of Changxing Group, Changxing Industry can easily make money around the world with its three popular products: post-it notes, sticky hooks, and railing boxes. Even if there are many piracy problems, this only causes it to earn less.

Compared with the shipping industry, it is much easier to get started in the real estate industry, especially purchasing properties and collecting rent, as well as the development of residential communities. It is not difficult for Changxing Real Estate to make profits with the help of rising housing prices.

Su Yiyi nodded and said, "Then I think we can fight for it. You also said that the land in Central is getting smaller and smaller. Moreover, if our group has a big hotel in Central, it will also be a symbol of strength."

"Yes, it's the name of this hotel that makes me a little confused." Yang Wendong smiled and asked, "Yiyi, which name do you think is better, Four Seasons Hotel or Shangri-La Hotel?"

When he heard the name of the hotel before, he thought of the names of famous hotels in his previous life, most of which had existed before the 50s, but Four Seasons and Shangri-La had not yet appeared.

He had stayed in these two hotels several times in his previous life, and could be said to like them both.

"Four Seasons? Shangri-La?" Su Yiyi thought for a moment and said, "They all sound good. Should we decide now?"

Yang Wendong nodded and said, "It has to be done as soon as possible. When you submit your bidding application, you need to include the hotel's name and register it as a company."

Su Yiyi said: "Then I still think Four Seasons Hotel is better. It is translated into English as Four Seasons, which sounds smooth.

In Chinese, I guess many people don’t know what Shangri-La is. In English, not everyone knows Shangri-La either.”

Yang Wendong nodded and said, "Yes, even an illiterate person knows what the four seasons are. Shangri-La is indeed far inferior."

Su Yiyi added: "But the Four Seasons Hotel, the name sounds a bit ordinary."

"Haha, whether a hotel is ordinary or luxurious depends on management." Yang Wendong said with a smile: "Do you think Hilton, a hotel named after a surname, sounds luxurious?"

"That's right." Su Yiyi nodded. Yang Wendong said, "Then call it Four Seasons. I will also go for high-end positioning in the future. I will open one in Hong Kong first, and then go overseas when I have the ability.

Maybe I can build a world-class five-star hotel chain like Hilton Hotels.”

The Four Seasons Hotels in the past were well-known, but there were not many of them. This might be because the founding team had limited funds and did not expand much in the 20th century.

After the 21st century, brands such as Hilton and InterContinental had already occupied many places, leaving latecomers with little chance to grow bigger.

Su Yiyi smiled and said, "Then we have to invest overseas, right?"

"Well, Hong Kong can't accommodate a few hotels." Yang Wendong nodded and said, "But this is a matter for a long time to come. Now we should consider the present and take over the land on Queen's Road first."

Although the first motivation for this investment was for the land, once the hotel business is started, it will definitely develop in this direction.

Su Yiyi asked again: "Then why go to a Chinese bank? Wouldn't it be better to go to HSBC or Standard Chartered?"

Yang Wendong explained: “This is mainly a matter of balance. One is my loan requirements. If the risk is not too high, I can also attract banks.

Secondly, I cannot over-borrow from just one bank. I borrowed a lot of money from HSBC for my previous investment in Kwun Tong. Zheng Yuhua from Changxing Shipping recently told me that she hopes to consider buying new ships for shipping. For future foreign-related loans, I will probably still look for banks like HSBC and Standard Chartered.”

"Are you going to buy a new boat?" Su Yiyi asked, "Don't you think second-hand boats are more convenient?"

Yang Wendong replied: "It is convenient. I will continue to buy second-hand ships, but I am also considering new ships, because if I want to expand in the shipping industry, I can't just rely on second-hand ships."

There are too many restrictions on second-hand old boats, and there are not so many old boats with low prices and similar quality.

More importantly, the Middle East crisis in 67 was approaching, and the new ships could more easily seize this benefit.

Su Yiyi nodded and said, "Oh, I heard that many Hong Kong ship owners buy ships from Japan."

"I should also go to Japan to buy it." Yang Wendong nodded.

In this era, the most cost-effective ships are Japanese ships, which are 3% to 4% cheaper than European ones. In addition, they are closer and have convenient after-sales service.

In addition, Japanese banks will also participate in lending, but they will also control risks and may not lend the full amount. Therefore, many of Hong Kong's shipping tycoons also need to rely on large local banks.

"Yeah." Su Yiyi didn't ask any more questions.

He also knew that Yang Wendong had a great interest in real estate and shipping.

Yang Wendong smiled and said, "After a while, I might go to Japan to look at ships, and then I'll take you to Japan to play."

"Okay." Su Yiyi agreed.

……

Day 2, The Peninsula Hotel:

Yang Wendong met Ho Sin Hang of Hang Seng Bank and said with a smile, "Mr. Ho, I heard that Hang Seng's business is pretty good recently?"

"Haha, not bad." He Shanheng replied, "But it's far inferior to Yang Sheng. Your name has been all over the news media recently."

Yang Wendong said: "Our Hong Kong Chinese enterprises have been able to develop so fast because they rely on Chinese banks. Otherwise, we don't know when we can develop."

This is also the truth. Although finance itself does not create value, it is necessary to have it, otherwise the real industry cannot develop. Even if Yang Wendong had an idea that would make money in the early days, without the start-up capital from the bank, it would probably take many years to develop.

"It's mutually beneficial, and our bank will also benefit." He Shanheng paused and asked, "Mr. Yang is so eager to ask me out, could it be that he wants to have some big cooperation with Hang Seng?"

"Yes." Yang Wendong nodded and said, "Sheng He should also know about the land at 2 Queen's Road, right?"

"Mr. Yang wants to take over that piece of land?" Ho Sin Hang was naturally a smart man, and then asked: "But the Hong Kong government has restrictions on that piece of land, and only a hotel can be built. Mr. Yang wants to run the hotel himself, or hire an overseas company to manage it?"

"Is there any difference?" Yang Wendong asked back.

Ho Sin Hang replied: “There is a difference. If it is managed by an overseas giant, there will be contractual restrictions. In addition, they have many years of management experience, so the bank’s risk on my side will be much smaller.

If you were to manage it yourself, Mr. Yang, we wouldn't be so sure?"

Yang Wendong asked again: "The Peninsula Hotel is also managed by the Kadoorie family, and the profits are quite high, right?"

He Shanheng replied: "That's true, but they have been operating for many years and have become famous, so it's still different."

Yang Wendong said: "Then if I poach his people, they will have management experience. As for fame, I have a media company under my control, so it won't be difficult to promote it."

"Mr. Yang owns a media company, which is indeed an advantage." He Shanheng nodded and said, "Since Mr. Yang has decided to run his own business, I won't say much.

I wonder how much loan Mr. Yang needs?"

Yang Wendong said: "The current auction price is still uncertain, and I can't give an exact value, but I estimate that it will be around 3000 million Hong Kong dollars."

"This data accounts for almost 5 percentage points of our bank's deposits," said He Shanheng.

Yang Wendong smiled and said, “It’s a lot, but after all, it’s 3.8 square feet of land on Queen’s Road, so it’s worth the price.

I am also very optimistic about the future of Hong Kong's economy. Building a large five-star hotel is unlikely to lose money in terms of revenue."

The advantages of being a time traveler are indeed not very helpful in running a hotel, but as long as Hong Kong's economy develops rapidly and there are more and more tourists from home and abroad, in Hong Kong, which lacks luxury hotels, it is estimated that someone who can run a hotel at a loss is considered a talent.

Of course, the real estate crisis of 66-67 does not count, there is nothing we can do about it.

He Shanheng thought for a moment and said, "Mr. Yang, I can agree to give you 7% of the final transaction price of this land as collateral, but I still need to negotiate internally about the interest."

"Okay, such a big thing can't be decided immediately." Yang Wendong said, "But I have many options here, and I will only choose the one with the most suitable conditions in the end."

"I understand." He Shanheng nodded.

……

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(End of this chapter)