'Richest' village's luxury hotel loses money
By Yang Jian |
April 16, 2013, Tuesday
|
Print Edition
Print Edition
THE new leader of a village that calls itself China's richest responded to reported financial losses at the village's new, iconic luxury hotel and other tourism projects by saying some losses are inevitable during the village's transformation to tourist mecca.
Wu Xie'en, Party chief of Huaxi Village in Jiangsu Province's Jiangyin City, said that while investments on the tourism are running a deficit now, they will become the most profitable property of the village in the future.
Wu Xie'en is a son of the village's former Party chief Wu Renbao, who led the transformation of the village by making its residents shareholders and talking up his grandiose plans. Wu Renbao died in March of cancer.
"The village aims to eliminate backward industries and develop tourism and modern agriculture, otherwise it will be a dead-end road for the village's development," Wu Xie'en said.
The Long Hope International Hotel, built for 3 billion yuan (US$485 million), and mostly backed by the residents, was seen as the symbol of the village's transformation. The 74-story five-star hotel, part of a 328-meter-tall tower, is China's eighth-tallest building.
However, the hotel only made 150 million yuan in revenue last year, making it far from the profitable, said Dai Liming, the hotel's general manager.
The losses at the hotel were announced at the first meeting of stockholders of the village, or the Shenzhen-listed Huaxi Group, after Wu Renbao's death.
Also, a major part of the revenue actually came from the villagers rather than tourists, according to Dai.
To increase "domestic demand," the village gave fewer annual bonuses to its 2,000 resident shareholder families in 2012 but instead handed out coupons that could be used only at the hotel and shopping malls in the village.
Many villagers used the coupons to move into the hotel and some families stayed for as long as a month.
There are dozens of families living in the hotel every month, according to Dai. The lobby, glittering in gold and silver tones, often has children running through it.
Other tourism spots in the village also lost money, such as the helicopter tour and five luxury clubs in the hotel.
"The village concentrates less on the sales volume or GDP, than on how to transform its traditional industries at a faster pace," said Wu Xie'en.
The village grew around industries like steel, cement and fabric factories, which enriched many residents.
Wu Xie'en, Party chief of Huaxi Village in Jiangsu Province's Jiangyin City, said that while investments on the tourism are running a deficit now, they will become the most profitable property of the village in the future.
Wu Xie'en is a son of the village's former Party chief Wu Renbao, who led the transformation of the village by making its residents shareholders and talking up his grandiose plans. Wu Renbao died in March of cancer.
"The village aims to eliminate backward industries and develop tourism and modern agriculture, otherwise it will be a dead-end road for the village's development," Wu Xie'en said.
The Long Hope International Hotel, built for 3 billion yuan (US$485 million), and mostly backed by the residents, was seen as the symbol of the village's transformation. The 74-story five-star hotel, part of a 328-meter-tall tower, is China's eighth-tallest building.
However, the hotel only made 150 million yuan in revenue last year, making it far from the profitable, said Dai Liming, the hotel's general manager.
The losses at the hotel were announced at the first meeting of stockholders of the village, or the Shenzhen-listed Huaxi Group, after Wu Renbao's death.
Also, a major part of the revenue actually came from the villagers rather than tourists, according to Dai.
To increase "domestic demand," the village gave fewer annual bonuses to its 2,000 resident shareholder families in 2012 but instead handed out coupons that could be used only at the hotel and shopping malls in the village.
Many villagers used the coupons to move into the hotel and some families stayed for as long as a month.
There are dozens of families living in the hotel every month, according to Dai. The lobby, glittering in gold and silver tones, often has children running through it.
Other tourism spots in the village also lost money, such as the helicopter tour and five luxury clubs in the hotel.
"The village concentrates less on the sales volume or GDP, than on how to transform its traditional industries at a faster pace," said Wu Xie'en.
The village grew around industries like steel, cement and fabric factories, which enriched many residents.
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