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Kempinski Puts on Hold its Hotel in North Korea

Kempinski Hotels reported that it had postponed the opening of the Ryugyong hotel in Pyongyang (North Korea). The official reason for such a decision is an increasing political uncertainty in the country.

The spokesman of the Geneva-headquartered hotelier has already confirmed that decision. Previously, Kempinski reported the launch of a hotel in North Korea together with the Chinese Beijing Tourism Group. However, the companies did not manage to reach agreement with the government of North Korea. According to the comment of Kempinski, “market entry is not currently possible”, and no additional details have been revealed at the moment. The hotelier seems to have reached no agreement with the country’s government when they were negotiating the contract.

Kempinski had a chance to become the first Western hotel company to operate an accommodation in the totalitarian communist country of North Korea. The hotel in Pyongyang is not new. The building of the Ryugyong skyscraper was started in 1987. Initially the building was financed by the Soviet Union, but its fall brought North Korea to crisis, and the construction works were stopped. That happened in 1992, and since that time the abandoned building in the center of the city has been standing abandoned. The building was finished in 2008, when the Cairo-headquartered Orascom Telecom Media & Technology Holding agreed to invest US$180 in the building in order to get the permission to launch the Koryolink cellphone network.

Now the fate of the skyscraper is unknown, but due to the latest news from North Korea, including their third nuclear test and putting rocket units on standby, it is unlikely that good news will appear in the nearest future.

09.04.2013

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