Checkout Time: Hilton Gives Up Its Original China Hotel

Hilton is moving out of its first-ever hotel in China, in a city where the luxury accommodation scene is heating up.

Hilton Hotels & Resorts will no longer manage the Hilton Shanghai, in the city’s central Jing’an district, after Dec. 31, according to a brief statement posted on the company’s website.

When the Hilton Shanghai opened its doors as Shanghai’s first five-star foreign-operated hotel in 1988, it was a potent symbol of the country’s economic reforms and new openness to the world. Over the years, it has welcomed foreign celebrities and heads of state, and hosted expo events.

When asked to comment, a Hilton spokesperson directed Caixin to an article with details of the closure by Shanghai publication The Bund.

The general manager of the Hilton Shanghai said in spring that it would be hard to refurbish the nearly 30-year-old hotel because of the high cost and difficulty of recouping the money spent, The Bund reported. The hotel — which has been joined in recent decades by a host of newer luxury establishments, run by both foreign and local brands — last underwent a partial renovation in 2009.

Chinese hospitality giant Jinjiang Inn is one of the candidates to take over management of the Jing’an hotel, according to Chinese-language publication Yicai.

Hotels opening in Shanghai in 2016 and 2017 are expected to bring the total number of five-star rooms in the city to 32,000 in 2018, creating an “oversupply situation in the market,” according to a recent report by property consultancy Knight Frank.

But this could be a situation where an international brand leaves an old landmark building and “swaps locations,” instead of a sign that Hilton is slimming down its Shanghai operations, David Ji, Greater China head of research at Knight Frank, told Caixin.

Ji cited examples such as the former Four Seasons Hotel in Bangkok, which shut down after decades in operation only to reopen as the Anantara Siam Bangkok Hotel & Spa in 2015. A new Four Seasons development in the city was announced soon after the rebranding.

Hilton runs a number of other hotels in Shanghai, including the Hilton Shanghai Hongqiao, at one of the city’s two international airports; and the Waldorf Astoria Shanghai, on the historic Bund.

“The hotel market is booming, and international brands are not losing shine,” Ji said. “In fact, when Chinese go abroad, the first brands they choose are the international brands that are famous in China.”

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)