Leofoo Palace Hotel, Taipei's Westin, closed after 20 years of losses

The Leofoo Palace Hotel, operated by Leofoo Tourism Group (2705) under the Westin Taipei brand, opened in 1999 as a flagship property in downtown Taipei. The hotel was housed in a building owned by Cathay Life Insurance, one of Taiwan's largest insurers, under a long-term lease arrangement. Despite its prime location and the Westin brand, the hotel never generated a profit in its 20 years of operation.

In 2017, the hotel recorded revenue of NT$1.29 billion, representing nearly 40% of Leofoo Tourism Group's total revenue. However, the property posted a net loss of NT$240 million that year, squeezed by annual rent increases and a slump in Taiwan's tourism sector. The hotel also faced NT$400 million in breach-of-contract penalties for failing to meet dining revenue targets set by the landlord. Even with an occupancy rate near 70% and an average daily room rate of NT$6,387, the hotel could not overcome its cost structure.

In April 2018, Cathay Life Insurance notified Leofoo that it would not renew the lease when it expired on December 31, 2018. Leofoo had attempted to negotiate a rent reduction, but the two sides could not reach an agreement — despite Cathay Life having voluntarily cut rent twice (7.3% in 2004 and 20% from 2009 to 2017). On November 2, 2018, Leofoo filed a mass layoff notice for 303 employees. The hotel closed its doors on December 31, 2018, and the building was later taken over by JR East's Hotel Metropolitan Tokyo.