A ‘seven star’ luxury hotel construction project in downtown Pyongyang has ground to a halt, multiple sources in North Korea have confirmed to NK News.
The construction of the hotel, which was previously claimed to be called the Yonggwang (영광호텔 – “Glory”) Hotel and include a major casino, was abandoned after foreign investors lost confidence in the project, one source claimed.
“They lost investment so as of now it’s just sitting there rotting away. No one is interested,” the source said, who requested anonymity due to ongoing business interests in the DPRK.
“I can confirm that there is no construction continuing of the building of the Glory hotel next to Koryo hotel at all,” said another source, also requesting anonymity due to current residence in Pyongyang.
Satellite imagery of the planned hotel, which was rumored to be a “seven star joint venture with the Chinese” of between 45 – 75 stories, shows the area of the site occupies an area nearly three times the size of the Koryo, one of Pyongyang’s most iconic hotels.
Had it been completed, the size of the foundation indicate the building would have boosted Pyongyang’s hotel capacity by at least several hundred rooms.
But while historical satellite imagery shows a rapid start to construction in late 2011, efforts to complete the building appear to have halted early in the process – sometime between spring and summer 2013.
Geoffrey See, Director of the North Korea-focused NGO Choson Exchange, told NK News that rumors suggested a Southeast Asian investor had taken over the project after the original Chinese investor pulled out, but that problems still remained.
“Its hard to say what the present status of the hotel is, but it seems part of a track record of DPRK’s environment still being too difficult for investors to navigate and to encourage them to maintain long-term interest in the market,” See said.
Dr. Antonio Fiori, Korea Foundation Endowment Chair at the University of Bologna, echoed See’s sentiment about the risks of foreign investment in North Korea.
“Who would risk their own money by investing in such a problematic country?” Fiori said, citing problems with rampant corruption, energy supply issues and hiring regulations that prevent the use of foreign labor.
“Running an investment without engaging in some form of corruption appears almost impossible in North Korea, and of course this puts foreigners off investment. The centralized government can also play a role in this lack of trust,” Fiori added.
Whether demand to fill rooms at the planned Yonggwang Hotel would have ever emerged, however, remains unclear. Despite the absence of a major tourist industry, North Korea has an abundance of hotel capacity in Pyongyang, with at least 12 hotels able to accommodate foreign visitors and a number of others built for local use only.
In 2013 Swiss hotelier Kempinski abandoned a much publicized plan to convert 150 rooms of the pyramid shaped Ryugyong hotel into a luxury hotel. Construction at the Ryugyong, which is 105 floors high, was begun in 1987 and abandoned in 1992.
Main picture: Dicks Simon, Flickr Creative Commons
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