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SHANGRI LA pulls out of Vienna project

Asian luxury hotel group SHANGRI LA announced they are pulling out of the planned project in Vienna which, initially was supposed to open early 2010, then an opening date was set for June 2011. Disagreements over the major construction delays, the actual construction issues have led to Shangri La’s decision and the difficulty by the developer to keep up financially may have been at the heart of Shangri La’s sudden decision.

Real estate developer Bauträger Austria Immobilien GmbH (BAI) said  that it was "totally surprised" about Shangri-La’s decision to cancel their contract, saying the cooperation has so far been "very good". BAI made clear: "The contract cannot be ended unilaterally just like that."

The five-star hotel located in the Schubertring boulevard in the city centre should have featured 207 rooms and suites and a 100 square-metre indoor swimming pool. The hotel was initially scheduled to start doing business last autumn. BAI poured more than 100 million Euros into the property after acquiring it seven years ago.

Shangri-La’s decision to cancel the contract means that around 180 people set to work at the hotel will be registered as unemployed. Business experts and commentators eagerly awaited the opening of the resort since it was tipped to cause a stir in the Viennese upmarket hotel business which has been labelled -turn on entering Vienna comes one day after reports claiming that Hotel Sacher director and Spanish Riding School (SRS) chief Elisabeth Gürtler plans to purchase a majority stake in Imperial Hotels Austria AG, a rival hotel management group. Business press revealed that the businesswoman was ready to grab a 52.1 per cent interest. The stake’s is estimated to be worth between 70 million and 90 million Euros. as rusty and inflexible by many.

News of Shangri-La’s UA possible acquisition would put Gürtler at the helm of some of the country’s best known and most expensive hotels including the Goldener Hirsch in Salzburg and Vienna’s Imperial and Bristol.

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