Hong Kong's Jumbo Floating Restaurant sinks in South China Sea

Popular tourist attraction, visited by Queen Elizabeth II, was on its way to undisclosed location

Hong Kong's Jumbo Floating Restaurant is towed out of the city's Aberdeen Harbour on June 14. AFP

Hong Kong's famous Jumbo Floating Restaurant has sunk in the South China Sea after being towed away from the city.

The tourist attraction, which has struggled financially recently, capsized on Sunday near the Paracel Islands after it "encountered adverse conditions" and began to take on water, its parent company said.

It was announced last month that, ahead of its licence expiration in June, Jumbo would leave Hong Kong and await a new operator at an undisclosed location.

The company said it was "very saddened by the incident", in which no crew members were injured.

"The water depth at the scene is over 1,000 meters, making it extremely difficult to carry out salvage works," Aberdeen Restaurant Enterprises said on Monday.

Marine engineers had been hired to inspect the floating restaurant and install hoardings on the vessel before the trip and "all relevant approvals" had been obtained.

The restaurant closed in March 2020, with the Covid-19 pandemic the last in almost a decade of financial woes.

Operator Melco International Development said last month the business had not been profitable since 2013 and cumulative losses had exceeded HK$100 million ($12.7m).

It was still costing millions in maintenance fees every year, and around a dozen businesses and organisations had declined an invitation to take it over at no charge, Melco said.

The restaurant set off shortly before noon last Tuesday from the southern Hong Kong Island typhoon shelter, where it had sat for nearly half a century.

Opened in 1976 by the late casino tycoon Stanley Ho, in its glory days it embodied the height of luxury, reportedly costing more than HK$30m to build.

Designed like a Chinese imperial palace and once considered a must-see landmark, the restaurant drew visitors from Queen Elizabeth II to Tom Cruise.

It also featured in several films, including Steven Soderbergh's Contagion, about a deadly global pandemic.

Jumbo's departure from Hong Kong was met with regret and nostalgia from many Hong Kong residents.

Some online commentators described pictures of the floating palace sailing across a charcoal grey ocean towards the horizon as a metaphor for Hong Kong's future.

The city has seen harsh pandemic restrictions put its status as an international hub at risk, while a national security law imposed by Beijing has stifled dissent, remoulding Hong Kong in China's authoritarian image.