Six years after construction began, Shangri-La Hotels and Resorts opened its first property in Mongolia Wednesday to target business travelers seeking opportunities in the nation’s nascent mining economy.
The 290-room hotel and adjoining retail and office complex in downtown Ulaanbaatar represent a $500 million investment, according to MCS Group, Mongolia’s largest conglomerate with real estate and construction businesses, and a joint owner of the development.
Shangri-La opens its doors as the economy slows down because of weak commodity prices and protracted disputes with investors, including Rio Tinto Group, which manages the Oyu Tolgoi mine. Foreign investment in the country tumbled to $389 million last year from $4.45 billion in 2012.
The Shangri-La opening “is a welcome symbolic event, coinciding with the turn of Mongolia’s fate,” said Munkhdul Badral, head of market intelligence firm Cover Mongolia.
Construction of the complex, which began in late 2009, was delayed by Mongolia’s adverse cold weather, said William Wong, director of communications for the hotel.
The property opens amid a dearth of high-end accommodation in the Mongolian capital ahead of the 2016 Asia-Europe Meeting, with delegates arriving in Ulaanbaatar from more than 50 countries.
Rooms at the Shangri-La, located between the ancient Choijin Lama Temple Museum and an amusement park, start at $240 a night.
While primarily viewed as a destination for business travelers, the hotel will also target high-end tourists to a country known for its landscapes, wildlife, Buddhist heritage and nomadic hospitality.
High-end tourists are looking for authentic “travel in the countryside where the travel is rough,” said Jan Wigsten, owner of tour company Nomadic Journeys. “Back in Ulaanbaatar, they are looking for creature comforts.” Shangri-La helps “with that transition from the city to the countryside,” he said.
The second phase of the Shangri-La complex, due to open in the third quarter of 2016, includes two 28-story towers. The new wing will include luxury apartments, retail space and 19 floors of commercial space.