Hong Kong’s hotels are down on their knees as two in three rooms sat empty in Asian hospitality industry’s first-quarter slump
- Average nightly room rate across all categories of hotels plunged 41.5 per cent in Hong Kong to HK$865 (US$111.6) during the first quarter
- Hong Kong’s percentage slump topped Shanghai’s 15 per cent drop to 514 yuan, and Osaka’s 13.3 per cent decline to Ұ11,951 in third place in the same period
Hong Kong hotels were the biggest losers in Asia’s hospitality industry in the first-quarter, as travel bans and lock-down orders to contain the global coronavirus pandemic kept business travellers and tourists away, hitting the financial hub particularly hard.
Average nightly room rate across all categories of hotels plunged 41.5 per cent in the city to HK$865 (US$111.6) during the first quarter, as an estimated two-thirds of rooms across the city sat empty, according to Colliers’ Asia Hotel report. Hong Kong’s percentage slump topped Shanghai’s 15 per cent drop to 514 yuan (US$72), and Osaka’s 13.3 per cent decline to Ұ11,951 (US$111) in third place in the same period.
Hong Kong’s hotel operators, on their knees since anti-government protests last June started to deter visitors, have “experienced a bumpy and challenging period over the last year,” said Rosanna Tang, Colliers Head of Research for Hong Kong and Southern China. Average occupancy rate across the region fell to 42.1 per cent in the first quarter, with the average room rate dropping to US$97.9, the report said.
The coronavirus pandemic, which sickened 1,056 people and claimed four lives in Hong Kong at the latest count, has added to the business woes of a city that’s already in its deepest recession in decades. Thousands of events, shows, exhibitions from Art Basel’s contemporary art expo to Standard Chartered’s Hong Kong Marathon had been cancelled amid the outbreak, leaving hotel operators to watch in dismay as their rooms sit empty.
The situation is “worse than the Sars (severe acute respiratory syndrome) outbreak in 2003,” said Michael Li Hon-shing, executive director of The Federation of Hong Kong Hotel Owners, with 86 members running about 200 hotels and employing some 80,000 workers. “With no tourist arrivals, hotel operators had to undertake a price war to fight for guests, but a lot of rooms are still sitting empty.”
