Shangri-La Sets North America in Expansion Sights

Shangri-La Hotels and Resorts is actively seeking to expand in North America, with cities such as New York, San Francisco, Boston and Washington, D.C., high on the Hong Kong-based luxury hotelier's radar screen.

"We are looking for well-located properties, in key gateway, high-barrier to entry markets," Stephen Darling, regional vice president of Shangri La Hotels and Resorts, told CPN this morning.

The Shangri-La hotels located in North America will have some differences, Darling said. They will have fewer rooms per hotel—typically between 150 and 250--than its other locations, and the rooms will be larger, averaging 500 square feet, with the bathroom 150 square feet.

"Americans typically like larger guestrooms," Darling said. "Europeans are usually happy with guestrooms that measure from 250 to 300 square feet."

Shangri-La will open two properties in North America in 2008: a 120-room hotel in Vancouver, B.C., and a 147-room property in Miami, that will also contain 105 Living Shangri-La fractional residences. In 2009, a 222-room property will open in Chicago, and a 400-room Shangri La will open in Las Vegas in 2010, part of the $4 billion Echelon Place mixed-use project being developed on the Strip by Boyd Gaming Group.

Shangri-La has also had some opportunities to expand to Dallas and Atlanta, but the company chose not to pursue them. "They are great cities, but are not part of our strategy," Darling said. A key factor in determining where Shangri-La will expand is the amount of travel between a city and Asia. A city with a large number of universities, such as Boston, fits that profile.

While Shangri-La is a significant owner of hotels, the company will grow in North America by securing management agreements, he said. Ownership makes more sense in Asia, because of the company's dominant market share, and the lower cost of both construction and labor.

"Many times we make our investment back in 5 to 7 years," he said, noting that he wouldn't rule out ownership entirely, though, naming New York as one city "where we might consider that."