Shangri-La makes shock U-turn over Vienna hotel project

The future of a planned five-star hotel in Vienna is uncertain after Asian hotel chain Shangri-La pulled out.Real estate developer Bauträger Austria Immobilien GmbH (BAI) said today (Weds) it was “totally surprised” about Shangri-La’s decision to cancel their contract, saying the cooperation has so far been “very good”. BAI made clear: “The contract cannot be ended unilaterally just like that.”The Asian hotel management firm’s first representation in Austria was set to open in May of this year. The five-star resort located in the Schubertring boulevard in the city centre should have featured 207 rooms and suites and a 100 square-metre indoor swimming pool.The hotel was initially scheduled to start doing business last autumn. BAI poured more than 100 million Euros into the property after acquiring it seven years ago.BAI said today: “There must be talks. Our target is to open the hotel as planned. We are confident about finding a solution.”The real estate developer also claimed that the hotel was ready to open.Shangri-La’s decision to cancel the contract means that around 180 people set to work at the hotel will be registered as unemployed.Business experts and commentators eagerly awaited the opening of the resort since it was tipped to cause a stir in the Viennese upmarket hotel business which has been labelled as rusty and inflexible by many.Now a project aiming to open a Four Seasons hotel in the city centre of the Austrian capital in 2012 is surely to become the focal point of media attention. The hotel will offer approximately 160 rooms over 30,000 square metres, according to reports.Signa Holding chief Rene Benko meanwhile plans to set up a hotel in the former Länderbank headquarters in Vienna’s Innere Stadt district. The businessman has remained tight-lipped over how far negotiations have already proceeded.News of Shangri-La’s U-turn on entering Vienna comes one day after reports claiming that Hotel Sacher director and Spanish Riding School (SRS) chief Elisabeth Gürtler plans to purchase a majority stake in Imperial Hotels Austria AG, a rival hotel management group.Business press revealed that the businesswoman was ready to grab a 52.1 per cent interest. The stake’s is estimated to be worth between 70 million and 90 million Euros.A possible acquisition would put Gürtler at the helm of some of the country’s best known and most expensive hotels including the Goldener Hirsch in Salzburg and Vienna’s Imperial and Bristol.