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Friday, March 27, 2020, 08:53
Hoteliers unable to see light at the end of the tunnel
By Edith Lu
Friday, March 27, 2020, 08:53 By Edith Lu

As inbound tourism continues to bear the brunt of the coronavirus pandemic, Hong Kong hoteliers remain pessimistic about what the market holds in the first half of this year.

Some of the biggest hotel operators have seen average occupancy rates and revenues nose-dive amid stringent measures being taken in Hong Kong and abroad to curb the spread of the virus, including lockdowns, global travel alerts and bans on public gatherings.

Wharf Holdings — one of Hong Kong’s biggest landowners — said the occupancy rate at its three local hotels has gone down to low single digits, with 98 percent of last year’s revenue lost.

“Business for the first quarter of 2020 was consigned to a washout, and the second quarter may not fare much better either even if markets return to normalcy quickly,” the company said in an exchange filing. 

Stephen Ng Tin-hoi, chairman and managing director of Wharf Holdings, said he believes most five-star hotels in the city are facing the same plight. 

Revenue from the group’s hotels last month amounted to no more than 5 percent of that for the same period in 2019, and chances of a visitor rebound next month are slim.

“The pandemic is adversely affecting the group’s retail and hotel businesses in Hong Kong and on the Chinese mainland,” said conglomerate Swire Properties Chairman Merlin Swire.

He said occupancy and revenue at Swire’s hotels have plunged this year, and the group will try to save costs without affecting the long-term relationship with tenants and other customers.

Swire owns and manages three hotels in Hong Kong, four on the mainland and one in the United States. The group said the operating profit before depreciation of its managed hotels fell by 16 percent to HK$168 million (US$21.6 million) last year, battered by the months-long social unrest and the travel downturn. Although its hotel operations on the Chinese mainland and in the US have improved, this was more than offset by a deteriorating performance in Hong Kong.

Tourist arrivals in the SAR hit a new low of 199,000 in February — down 96 percent from the same period a year ago — according to the Hong Kong Tourism Board. The number of mainland visitors tumbled by nearly 98 percent last month, while those from non-mainland markets plummeted by about 90 percent. The downtrend is likely to persist in March. 

The HKTB said it plans to allocate HK$400 million to prop up the tourism sector when the pandemic eases.


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