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Outrageous $275 billion tourism city plan
From: BBC          Published On: November 8, 2012, 9:00 GMT
 
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Outrageous $275 billion tourism city plan

The unfinished Ryugyong Hotel has dominated Pyongyang's skyline for more than two decades.


The North Koreans started erecting the 330-meter Ryugyong Hotel, the tallest hotel at the time, in 1987.

Almost three decades later, the ambitious project is finally looking to open for business, spelling a possible end for the Ryugyong Hotel laying claim to the being the tallest unoccupied building in the world.

Kempinski Hotels & Resorts is due to be the operator of the 105-story hotel. Construction of the hotel has cost North Korea an estimated US$750 million or 2 percent of the GDP.

The 'hotel of doom'

The German hotel group said earlier this month it is in negotiation to manage the pyramid-shaped skyscraper, dubbed by media as "the hotel of doom," which has stood unfinished and completely empty in Pyongyang for 20 years, according to Hotelsmag.

This could mark Kempinski, which operates 74 five-star hotels in 32 countries, the first Western hospitality company to run a business in the mysterious Asian nation.

The Ryugyong Hotel is expected to open -- partially -- as early as summer 2013, but it is not clear whether or not it will keep its original name or operate under the Kempinski brand.

The massive hotel may open around 150 guest rooms at first with this figure to expand later on. The rest of the 360,000-square-meter space will house shops, restaurants, meeting facilities, and the like.

'Money-printing machine'

When asked about the motivation behind the bold business move, a representative from Kempinski told CNN that the company "believes in early market entry into countries which are poised to open up to international business" and that the company's success in China and Russia proved its early-bird strategy.

This echoes what Kempinski's chief executive officer Reto Wittwer said at a business forum in Seoul last week.

"This pyramid monster hotel will monopolize all the business in the city," said Wittwer, according to the same article on Hotelsmag.

"I said to myself, we have to get this hotel if there is ever a chance, because this will become a money-printing machine if North Korea opens up."

The speech was also reported in Bloomberg.

Wittwer, 64, was first approached by Ri Chol, North Korea's former ambassador to the United Nations, in Geneva more than 10 years ago to discuss investment for the Ryugyong Hotel, according to Bloomberg.
Building background

Ground was broken at the site in 1987 with the hotel scheduled to open two years later. But completion was delayed first in 1989 due to -- reportedly -- construction method and material problems, and then in 1992 because of funding issues.

The project ground to a halt completely in 1993.

Construction re-commenced in 2008 as Egyptian telecommunications company Orascom shelled out US$180 million to complete the building’s façade.

This investment is reported to be part of a US$400 million mobile phone license it had won from the North Korean government in 2008.


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