April 10, 2013 12:31
Europe's oldest luxury hotel chain Kempinski has abandoned plans to run the giant Ryugyong Hotel in Pyongyang, China's official Global Times reported Monday.
Kempinski planned to open the hotel, in a monstrous unfinished skyscraper in the North Korean capital, in July or August of this year but decided to pull out due to escalating tensions on the Korean Peninsula.
A spokesman for the German chain said it would be "unable to manage Ryugyong Hotel according to the standards of the Kempinski Hotel and Resorts under present circumstances."
A diplomatic source in Beijing said, "What country, let alone company, would be willing to do business in North Korea when it is issuing war threats every day?"
As recently as last November, Kempinski CEO Reto Wittwer voiced optimism over the venture and described the hotel as a potential "cash cow." As completion of the building has been epically delayed, the hotel chain planned to open 150 rooms on the top floors of the building first.
Construction on the 105-story building began in 1987 but was halted when the money ran out in May 1989. It resumed in 2008 when Egypt's Orascom, which has the mobile phone license in North Korea, invested US$180 million. Only the exterior has been completed so far.
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