Park Hotel Group loses management contract for Clarke Quay hotel

Park Hotel Group has lost its management contract for Park Hotel Clarke Quay, the second contract it has lost out of the six hotels it managed here. This comes after the winding up of a firm that used to own the Singapore-based hospitality group.

On Aug 28, landlord Ascendas Hospitality Reit terminated a master lease agreement and took possession of the 336-room hotel because tenant Park Hotel CQ failed to pay $5.92 million in debt by June 30.

Renamed the Riverside Hotel at Clarke Quay, it will be managed by Ascott International Management, a wholly owned unit of CapitaLand, under a short-term management agreement for six months. This agreement may be extended.

When The Straits Times visited the hotel yesterday afternoon, the Park Hotel Clarke Quay signage was gone. A worker who was putting up cordon tape around the hotel, currently a government quarantine facility, said he has not heard of staff cuts or retrenchment. He declined to be named.

Ms Tan Shin Hui, executive director of Park Hotel Group, said in a LinkedIn post seen by ST that Aug 27 was the last day of operations for Park Hotel Clarke Quay.

"This was our baby. From conception to birth and eventually maturing into a well-loved and high-performing hotel, we were there every step of the way. Today, we saw it take flight and leave our nest," she said.

She added that Park Hotel Group tendered for the site in 2006, built the hotel over 25 months and officially opened it in 2009. The site was sold to Ascendas Hospitality Trust in 2013.

"Unfortunately, life has a way of hitting us with tribulations and curve balls when we least expect it. The worst crisis since World War II struck the hospitality and travel industry in February 2020 and 18 months on, we are still in this pandemic and adjusting," Ms Tan said.

"Despite best efforts, the hotel's tenant didn't manage to successfully renegotiate pre-pandemic lease terms, which were impossible to sustain... I truly believe the tripartite, that is, landlords, tenants and Government, needs to work together in better ways to ensure that the economy, businesses and livelihoods are able to bounce back. There is no winner in this crisis," she added.

Ms Tan is married to Mr Allen Law Ching Hung, who is listed as Park Hotel Management's (PHM) sole shareholder, chief executive and director. He is the former CEO of Park Hotel Group and son of Mr Law Kar Po, who is ranked 15th in Forbes Asia's 2021 list of Hong Kong's 50 richest people.

Last month, the owner of another hotel, Destination Singapore Beach Road, terminated a 15-year hotel management agreement with PHM and took over management of the 300-room hotel at 700 Beach Road.

This followed the winding up of PHM, a firm that until recently owned Park Hotel Group. PHM was wound up on July 2 over a $5.2 million debt owed in relation to another hotel.

PHM is the parent company and guarantor of Park Hotel CQ, the tenant of Ascendas Hospitality Reit. Ascendas Hospitality Reit is owned by Ascott Reit, part of Ascott Residence Trust.

The Reit manager said on June 25 that a notice of intended forfeiture had been issued to Park Hotel CQ over outstanding payments relating to the master lease for Park Hotel Clarke Quay. A letter of demand was issued to Park Hotel CQ to recover sums due on March 1.

Park Hotel Group, a sole proprietorship, had its ownership changed on March 8 from PHM to Park Hotel Group Management. The new owner is wholly owned by a British Virgin Islands company called Good Movement Holdings. It has only one director, Ms Tan, who was appointed on March 1.

The dispute in relation to Park Hotel Clarke Quay was brewing when another landlord, New Park Property, in June sought to wind up PHM over $5.2 million of debt owed in relation to the 308-room Grand Park Orchard.

As PHM is now under liquidation, the next step is to work with liquidators to recover the outstanding rent and damages due under the master lease, Ascott said.

Other hotels run by Park Hotel Group here include Grand Park Orchard, Grand Park City Hall, Park Hotel Alexandra and Park Hotel Farrer Park.