It seems like everything in The 13 Hotel shines and glitters, from a gilded bed headboard to the swimming pool, except the one thing that perhaps matters the most – its balance sheet, which is in the red, just like its façade and signature Rolls-Royce Phantoms. A Macau Business reporter spent a night in this hotel — which is still without a casino, and whose occupancy rate was last known to be 8 percent — and recounted how his experience was sometimes pleasant and private, sometimes eerily scary, like in a horror movie.
On my way to The 13 Hotel, I was, like many others in this Internet-savvy generation, checking my social media. One photo immediately captured my attention — a red joss paper bin, where Chinese burn piles of papers known as ghost money as offerings to their ancestors and deceased.
The photo was left by a netizen as a comment on a news story about Hong Kong-listed South Shore Holdings Ltd, the developer and promoter of The 13 Hotel, which aims to dispose 40 percent of its interests in the embattled property. While the photo was a satire on the flamboyant outlook of the red hotel, I found the simile here somehow strikingly on point: the money has all vanished into thin air.
Before the omnipresent anti-corruption campaign conducted in Mainland China, the slowing economy and other factors that have plagued the Macau gaming market, a former investment banker named Stephen Hung had an ambitious plan in 2012. With a price tag of about US$ 1.6 billion, the billionaire was eager to offer an unprecedented, über-luxury experience to the “world’s wealthiest”, with about 200 duplex suites and villas and a gaming floor of up to 66 casino tables in the boutique 13 Hotel, which was once known as Louis XIII, a reference to the French king and a luxury French cognac brand.
Mr. Hung’s dream has however shattered over the years, as the project’s main clients — Mainland Chinese high-rollers who could lavishly splurge on gaming tables and other expenditures — have become rare in the city, if there are any left at all. What’s more, Hung has so far failed to secure the construction of a casino at the property.
In spite of the long delays (more than two years), the project “partially” opened in August 2018, and became fully operational one year later. The room rate of the most expensive villa in the luxury The 13 Hotel was once reported to exceed HK$ 1 million, but I managed to book a night in its smallest room type — split-level, one-bedroom suite — that still accounts for a gross 2,000 square feet in floor area, at “just” HK$ 1,700 for a weekday in October. The most expensive room type I found on a booking website totalled nearly HK$ 5,000 for the same date.
Not only have there been changes in the room rate, but the financial turmoil the hotel developer has been embroiled in could also be felt in some of the hotel offerings. Upon arriving, I expected to find a bespoke Rolls-Royce Phantom welcoming guests at the main entrance, as seen in the photos online.
Mr. Hung had ordered a fleet of 30 customised Phantoms, with a specially formulated ‘Stephen Red’ exterior paint and other requirements, which were delivered in 2016, the original opening time for the hotel. The total cost of the order was estimated at about US$ 20 million, the largest single commission in the history of Rolls-Royce.
However, 24 of these luxury vehicles, which were envisaged to chauffeur VIP guests to and from the hotel, were sold at a discounted HK$ 24 million this June allowing South Shore to repay bank loans for developing the project. The company reported a net loss of over HK$ 5.84 billion for the fiscal year which ended on March 31 2019, compared with a loss of HK$ 1.57 billion they faced a year earlier, as the hotel only generated HK$ 5 million in revenue from accommodation plus food & beverage in the same period.
The Phantom at the entrance was therefore replaced by a shuttle bus sporting an icon of the hotel, which only fetched guests between the property and Studio City, a resort project whose major shareholder is gaming operator Melco Resorts and Entertainment Ltd. Later, a staff member told me hotel guests can still book (in advance) for a ride in the Phantom — one was still visible in the hotel lobby as a showcase — with a charge of MOP 1,500 per ride. For other transportation choices to and from the hotel, guests could opt for taxis or that limited-route shuttle bus, the staff advised.
These austere measures were somehow apparent during my two-day experience at the hotel. Not long after the opening last year, Evian was the standard for bottled water providing for guests across the property, according to netizens, but during my stay I got Bonaqua, a water brand owned by Swire Coca Cola Hong Kong (for the record, Bonaqua water is good, but it is, no doubt, a cheaper alternative to Evian).
Le Bassin d’Or, the outdoor swimming pool on the fifth floor of the hotel, is described as offering a free flow of drinks for guests, but all I got in reality was a free flow of Bonaqua bottled water. The service station was unmanned during my two visits to the pool, in the evening and the morning, and the waterfall — which is said to be one of the world’s highest indoor waterfalls — was no longer operating.
After 10 pm, every day, the escalators linking the common areas of the first three floors of the hotel stopped working until the next morning. One of the staff members tried to explain this decision to me as “an environmentally conscious gesture”.
Fortunately, or not, this eco-friendly philosophy has not been applied to the elevators yet, one of the key features of The 13 Hotel. Each suite or villa is said to have a private elevator, which directs guests from the common area to their room.
Right after I had checked in at the hotel lobby, decorated with glossy golden walls, a butler immediately showed me the way to the elevators — not one, but two — I would use during my stay here. “You don’t have to press any button to access your room; you just have to tap your room key on the sensor”, the butler said, explaining the mechanism of the lift, which only has a few buttons for the first three floors and the basement of the hotel.
In short, an elevator is not exclusively used by one villa, but guarantees guests do not bump into each other in the lift. For instance, there are two elevators reserved for guests staying at Room 01 from the 5th to the 22nd floor, meaning 18 groups of people at most sharing the two lifts, but the system only allows guests from one room to use the lift each time.
In less than 10 seconds, the butler and I arrived to the private elevator lobby area of my room, a small-enclosed space with two lifts on one side and two gold doors on the opposite ends. “This door leads you to the common area, where you can access different floors from the basement to the 22nd floor”, the butler said, pointing to one of the gold doors.
Behind that gold door is a long corridor where other rooms on the same floor could be found, similar to the setting in other hotels. The only difference is that guests cannot directly access the room via the corridor, but need to pass through the private lift lobby first.
The other gold door at the private lobby, of course, headed towards the suite where I would spend the night. “If you have any questions or need anything, press “0” on your phone and call us anytime”, the butler explained curtly and left, while I was still digesting what I’d seen until then.
The extravagant design of the room is at times reminiscent of the Palace of Versailles in France, but at times looks unusually similar to a two-star hotel room aspiring to be a five-star hotel room. Talk about the brightly coloured sofa and chairs in the living room of the suite, they look exquisite and delicate at a distance; when you move closer to them, they look like furniture you could order from the magnificent Taobao, the Chinese online shopping answer to Amazon, but often criticised for selling counterfeited and pirated goods.
From the second I stepped into this luxury hotel, I immediately knew subtlety is not a word in the dictionary of Mr. Hung, who, by the way, has stepped down as the joint chairman and executive director of South Shore — formerly known as The 13 Holdings Limited and Paul Y. Engineering Group Ltd — since January 2018. From the spendthrift interior décor of the common area to the suite, there’s no room for your eyes to rest. Sparkling chandeliers; heavily decorated furniture; a king-sized, velvet-canopied bed; faux oil paintings hung on the wall and pasted on the ceiling; you name it.
While the façade of the hotel is embellished with the “Stephen Red”, the inside has so much gold that I wonder whether the tuhao in Mainland China — a Chinese term that could be loosely translated to nouveau riche — would be crazily in love with this. From the headboard of the bed to columns of the room, they are all elaborately carved and gilded. The shampoo, conditioner and body lotion that are available in the bathroom, as well as the razor, hairbrush and others, are all in gold colour.
But what surprised me the most concerning the use of gold colour is the Le Bassin d’Or, which features an enormous gold angel statue and other smaller statues hung on the botanical wall. After a first glance at the pool I thought it had been left unattended for a long time given the green colour of the water, but only when I looked closer did I realise that the interior of the pool is fully covered with golden mosaic that turns the blue water green. Quelle surprise!
Remains in place
In a parallel surprise, after taking a short break in that over-the-top-but-nicely-spacious room, I would have told myself, “Let’s go check out the casino.” Last known to be still the vice chairman of Rio Entertainment Group, which operates Rio Hotel & Casino, a satellite casino on the Macau peninsula under the gaming concession of Galaxy Entertainment Group, Mr. Hung reportedly claims to have had an agreement since 2008 with a gaming concessionaire for providing casino tables at The 13 Hotel.
However, he has never identified the concessionaire, nor has any of the six operators confirmed it would provide tables for the property. “No formal agreement has been entered into with any [Macau casino] concessionaire or sub-concessionaire as operator, in respect of any gaming operations in The 13 Hotel, though the memorandum of understanding entered into between a subsidiary of the company and an affiliate of one such operator… remains in place,” South Shore said in a filing to Hong Kong stock exchange this April.
“The entering into of a formal agreement continues to remain subject to, amongst other things, the operator making an application and obtaining approval from the Macau government to conduct gaming operations in The 13 Hotel,” the filing continued.
But it seems neither the gaming operators nor the administration have any initiative to do so in the near future amid the current economic and political climate. Although the Macau government officials have reiterated there’s no legislation barring a casino bing built in Coloane — the outlandish hotel is technically situated on the island, despite its claims to be located in the gaming district of Cotai — they stressed they would listen to public opinion, which has been negative towards any gaming elements being introduced to Coloane. In other words, South Shore is deprived of a quick way to cash in for its loss-making operation.
From the ground floor to the first three floors of the hotel, there are numerous small but well-designed parlours labelled as “exhibition areas”, which apparently were once configured as private gaming rooms. Coming down from my room via the private elevator to these parlours, I could understand what the hotel promoter claimed to cater for its guests, privacy, in which your whereabouts in the supposed gaming area is far from the public eye.
Baccarat tables, gambling chips, casino croupiers and so forth, of course, were not present, as the parlours had been left vacated. The entire first three floors of the hotel seemed to show not much sign of activities during my nearly-an-hour tour that night — I bumped into no staff or guests.
There’s no wonder that in its latest annual financial report for the period ended March 31, 2019, South Shore stated the occupancy rate of the hotel only averaged 8 percent since its partial opening in August last year, compared with the average occupancy rate of 91.6 percent for all Macau hotels and guesthouses recorded in 2018.
The environment that night indeed seemed to be eerily quiet, the only background noise coming from a red piano on the ground floor that was programmed to play on its own. These, together with some red angel statues hovering over the ceiling, sent shivers down my spine. While I decided to end my tour and go back to my room, it seemed impossible at first to locate my private elevator, amid so many twists and turns and nearly 20 elevators on each floor.
Taking one way and turning the corner, there was a dead end with the wrong lifts. Tried again and failed. As the background piano music apparently got faster and louder for the climax, so did my heart rate, and I felt that I could break into a run or a scream at any second. And that’s no exaggeration. While the hotel prides itself on offering a luxury and private experience, I found myself at that moment like I was wandering around a remote, isolated hotel in North America, where the Grady twins or Jack with the axe would show up in the next corner. Yes, I’m talking about the horror drama movie, The Shining. All gilded decorations shone and glittered around me, and I could not stop myself from thinking about The Shining.
After trying to find my way for about 10 minutes that seemed much longer, my elevator finally showed up again. Wasting no second to rush to my room, I then took a long bath and watched a movie in that spacious bathroom to calm myself. That roomy bathroom was my favourite part of the entire suite, which was exquisitely designed but not over the top, and equipped with a large bathtub, a separate shower area, two sinks, an electronic toilet seat and a TV. That’s more like what Mr. Hung said a few years ago during the ground-breaking ceremony of the project: creating “an experience from Macau that redefines the global standard.”
As my room overlooked an adjacent construction site, which meant no spectacular views of cityscape, I woke up slightly earlier than usual the next morning with the squealing and grinding noises of vehicles. After enjoying myself again with a long bath, I went down to Café Blanc on the ground floor for the breakfast, which was included in the HK$1,700 room rate. That’s also the other time I met other hotel guests during my stay — I saw two mainlanders when I was at the small gym on the 22nd floor on the previous day. While visitors across the border seemingly made up the main proportion of around 20 guests at the café, there were a duo from Hong Kong and five Westerners.
No buffet was available for the breakfast, with only Chinese-style and Western-style breakfast sets for guests to choose. I did enjoy my scrambled eggs, bacon, sausages and cheese under a ceiling made with wine glasses, but that’s slightly different from what the hotel was originally envisaged to be. An array of exquisite dining options, including L’Ambroisie, the sister restaurant of the Michelin 3-star establishment in Paris, was supposed to open doors in the hotel. This plan did not get off the ground, with only the café, a bar, a Chinese restaurant and a Japanese restaurant now available.
After satiating my stomach, it was time to pack and check out, whereupon I met the Hong Kong middle-aged couple again at the main entrance. Asked whether they enjoyed their stay, the duo gave a positive feedback, citing the spacious room and quiet environment. But would they come again? They hesitated before the wife commented, “We will see. We’ve seen enough of the hotel this time.” They apparently could read my mind.
Synergy with Oasis
One of the companies behind the high-end residential property projects in Coloane has recently announced it would acquire a 20-percent equity interest in a company owning The 13 Hotel.
Hong Kong-listed ITC Properties announced in a filing in October the acquisition of a one-fifth stake from South Shore Holdings Ltd in an entity called Uni-Dragon Ltd that indirectly owns the entire interests of the hotel and the land at HK$300 million.
“With the opening of the Hong Kong-Zhuhai-Macau Bridge, the tourism industry in Macau continues its fair performance,” ITC Properties, which also holds 10.48-percent interest in South Shore, justified the purchase in the filing. “Following the commencement of full hotel operation at [The 13 Hotel] in August 2019, the Group expects that the businesses… will gradually improve in line with the tourism and hotel industry in Macau.”
Another reason is due to synergy. ITC Properties held nearly 35.5-percent interests in Empresa de Fomento Industrial e Comercial Concórdia, S.A (Concord Industrial and Commercial Development Enterprise Limited), which is the developer behind the One Oasis and Sky Oasis complexes next to the hotel that offer several thousands of high-end apartments. Other shareholders of Concórdia include Nan Fung Group, Success Universe Group Ltd, ARCH Capital and Macau-based Linkeast Investments Ltd, which is linked to the family of late local business tycoon Ma Man Kei.
“In addition, the land [where The Hotel 13 is located] is adjacent to the successful residential project developed by Concórdia and is expected to enjoy synergies from the hotel operation at [The Hotel 13],” ITC Properties said. The company might increase its stake to 50 percent of the hotel in the future, and flagged the possibility of redeveloping the property “for purposes other than hotel use.”
The land plot of the hotel was actually once held by Concórdia. Before the handover, the former Portuguese administration granted land plots of 337,220 square metres without a public tender to Concórdia in 1975 for industrial development.
Given the change of the local economic structure, the administration took back part of the land parcels for public facilities and industrial usage in 1993, while Concordia was left with 14 plots of 55,652 square metres for the residential, commercial and hotel development. The land bank of Concórdia later swelled to 70,651 square metres in 2009, where One Oasis, Sky Oasis and The 13 Hotel have been built.
Concórdia only sold the land rights to build the hotel — The 13 Hotel — to Paul Y. Engineering Group Ltd — now known as South Shore — for HK$2 billion in 2012.