Hong Kong hoteliers raise alarm as rates and occupancy plunge amid protests

PETALING JAYA (Sept 25): Hotel operators in Hong Kong called on their government to waive rents and even allow properties to offer empty rooms on long-term leases, or for sale, to deal with a steep decline in occupancy and rates brought on by 16 weeks of protests in the city.

In a report by the South China Morning Post (SCMP) today, hotel operators said it is a matter of survival as some hotels at a new low of HK$71 (RM37.96) a night are now cheaper than subdivided flats in the city. It was compared to a subdivided flat of 100 sq ft in Causeway Bay which recently commanded a rent of HK$8,500 a month.

“Certainly, this year has been far more challenging than any other time for any industry,” said Girish Jhunjhnuwala, founder and chief executive of Ovolo Group, who has called for help for the local hospitality industry “given the current economic downturn”, which has hit been “felt across all corners of the city”.

Jhunjhnuwala told the SCMP that the tourism industry had been hit hardest, and that the government should waive rents and rates for at least a year, set up a short-term fund to help the hotel industry, give visitors incentives, such as special rates, to stop over in Hong Kong for a day or two, and instruct banks to waive interest on loans borrowed by hotels.

“It’s devastating to see the effect the recent situation in our city has had on local businesses, particularly on those of us in the hospitality industry,” he said, adding that the occupancy rate of “most hotels in Hong Kong was down 30% to 40%” on year, with some even down to 20%.

He warned that his company which employs more than 190 people in Hong Kong, may put frontline staff on reduced hours, reduced wages or, in some cases, even redundancies.

Hotels look for ways to boost business affected by protests ahead of predictions for a bleak holiday season

William Cheng, chairman and chief executive of Magnificent Hotel Investments said the government should relax rules so that converted industrial buildings and wasted hotels in industrial areas can be leased, or even sold, to locals for residential use.

“If the government recognises there is a need for housing for the young, it ought to ... relax the rules, [permitting] hotel rooms with kitchens, to be rented over 28 days, with hotel rooms saleable to individual buyers, like anywhere else in the world,” he said.

He said such a move “can potentially supply more than 500,000 units speedily” and ease the housing crisis in Hong Kong, the world’s most expensive property market.

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