Hong Kong hotels on cliff edge from protest, pandemic pain
Published Apr 28, 2020 12:00 am
By Reuters
HONG KONG - Hong Kong’s distinction as a shopper’s paradise used to draw tens of thousands of tourists to the China-ruled city every month, but a year of political unrest and the coronavirus crisis are driving some hotels to the brink of financial ruin.
A general view of a tourist attraction at Tsim Sha Tsui, following the novel coronavirus disease (COVID-19) outbreak, in Hong Kong, China April 2, 2020. (REUTERS/Tyrone Siu/File Photo / MANILA BULLETIN)
Hotel occupancy rates in the recession-hit economy have plummeted since protesters took to the streets last June, angry with Beijing’s perceived tightening grip over the city. The sometimes violent clashes with police scared away tourists, especially high-spending Chinese and business visitors put off by the political tensions.
The coronavirus outbreak was the final straw for Hong Kong’s battered hotel industry as room revenues took a hit from travel curbs and flight cancellations
“Nine-and-a-half hotels out of 10 are losing money now because there’re no more tourists and they need to solely rely on domestic demand, so they’re just hanging in there,” said property consultancy CBRE Executive Director Reeves Yan.
The industry posted an overall occupancy rate of 29% in February compared with 91% a year earlier, the Hong Kong Tourism Board said, as visitors to the financial hub plunged 98% for the month.
Now, with much of the border closed with mainland China and travel restrictions to contain the spread of coronavirus extended, some hotels are shutting their doors for good or taking time out to renovate.
Three and four-star hotels, many run by domestic investors including Casa Deluxe Hotel, Butterfly on Morrison and two branches of Empire Hotels, have closed down in the past three months.
The InterContinental Hotel overlooking Hong Kong harbour closed its doors last week to undergo a two-year facelift that will see it lay off around 500 people. Many 5-star international hotels recorded single-digit occupancy rates in February and March, but they have more cash reserves to keep them going than smaller hotels, industry participants said.
A general view of a tourist attraction at Tsim Sha Tsui, following the novel coronavirus disease (COVID-19) outbreak, in Hong Kong, China April 2, 2020. (REUTERS/Tyrone Siu/File Photo / MANILA BULLETIN)
Hotel occupancy rates in the recession-hit economy have plummeted since protesters took to the streets last June, angry with Beijing’s perceived tightening grip over the city. The sometimes violent clashes with police scared away tourists, especially high-spending Chinese and business visitors put off by the political tensions.
The coronavirus outbreak was the final straw for Hong Kong’s battered hotel industry as room revenues took a hit from travel curbs and flight cancellations
“Nine-and-a-half hotels out of 10 are losing money now because there’re no more tourists and they need to solely rely on domestic demand, so they’re just hanging in there,” said property consultancy CBRE Executive Director Reeves Yan.
The industry posted an overall occupancy rate of 29% in February compared with 91% a year earlier, the Hong Kong Tourism Board said, as visitors to the financial hub plunged 98% for the month.
Now, with much of the border closed with mainland China and travel restrictions to contain the spread of coronavirus extended, some hotels are shutting their doors for good or taking time out to renovate.
Three and four-star hotels, many run by domestic investors including Casa Deluxe Hotel, Butterfly on Morrison and two branches of Empire Hotels, have closed down in the past three months.
The InterContinental Hotel overlooking Hong Kong harbour closed its doors last week to undergo a two-year facelift that will see it lay off around 500 people. Many 5-star international hotels recorded single-digit occupancy rates in February and March, but they have more cash reserves to keep them going than smaller hotels, industry participants said.