Asian Hoteliers Find Room In The West

After 30 years of helping build up one of Asia's richest property empires, Payson Cha Mou Sing is still studying new businesses. The 52-year-old managing director of Hong Kong-based HKR International Ltd., part of a family empire with some $1 billion in cash, has taken charge of nine luxury hotels in the U.S., Europe, and Asia that HKR has purchased since 1993. With Asian real estate trading at bubble prices everywhere from Singapore to Shanghai, the West is looking cheap to developers such as HKR. Richer and more aggressive than the Asians who got burned during property binges in the 1980s, the investors are approaching foreign markets much more strategically. "I want to know exactly what we're getting into," says Cha.

Rather than looking at prime hotels as status symbols or quick-profit asset plays, such groups as Singapore's CDL, Thailand's Dusit, and Hong Kong's New World want to run the businesses themselves. The invasion appears well-timed. After a shakeout following overbuilding in the 1980s, the U.S. hotel industry is in its best shape in years. Profits have grown from $2.4 billion in 1993, to a projected $7.9 billion in 1995, according to Smith Travel Research. But since banks and other investors are eager to unload hotels they got stuck with in the late 1980s, many still are selling at up to 30% less than their replacement cost. A New York property can be had for $150,000 per room, one-third of the cost in Hong Kong or Singapore.