The outlook for Hong Kong’s hotel sector looked bleak as occupancy continued to fall on the run-up to Christmas despite room rates dropping to as low as US$12 a night.
Hotel rates for Christmas hit a low of HK$93 (US$12) at the Winland 800 Hotel in Tsing Yi, which is offering the rate through the Trip.com website. The hotel did not immediately respond to the Post’s request for comment.
While the rate for the three-star, 800-room hotel with sea views had risen slightly from a low of HK$71 (US$9.06) in September, this increase did not signal an improved business environment for the hotel industry.
“In the earlier months of the recent social problems, by significantly lowering room rates we were still able to get full house or high occupancy,” said William Cheng, chairman and chief executive of Magnificent Hotel Investments, which owns nine hotels, including Best Western in Hong Kong.
“But in the recent months of November and December, even with very competitive room rates, we found it hard to achieve good occupancy,” he said. “The room rates for all hotels across Hong Kong, including three-star, four-star and five-star hotels [across Hong Kong] had all dropped and become equally competitive,” he said.
From September to December, Magnificent’s hotels had seen revenue drop by up to 70 per cent, as occupancy and room rates fell. Their hotels in Hong Kong managed to achieve an occupancy rate of above 50 per cent for Christmas, Cheng said, though revenue did not improve.
Hotels in the Tsim Sha Tsui area were the worst hit, according to Cheng.
“Some of our hotels in North Point, Sheung Wan saw less of a problem. However, traditionally the most popular locations such as Causeway Bay and Tsim Sha Tsui saw the most severe drop compared to last year,” he said.
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