Hong Kong hoteliers cautious about openings even as third coronavirus wave eases and staycations rise during 'golden week'

By Lam Ka-sing

/ SCMP |

October 7, 2020 4:17 PM SGT

SINGAPORE (EDGEPROP) - Hong Kong's third coronavirus wave might have eased and local demand might have risen during the recent public holiday, but the city's hotel operators are not taking any chances and remain cautious in what is still a challenging market.

Some have opened their properties after delays, while others have postponed launches and will follow developments around the pandemic before deciding on welcoming guests.

Urbanwood Ap Lei Chau, which has 50 rooms, opened last month after a delay. "We originally planned to launch our new hotel in the second quarter ... however, owing to the serious impact of Covid-19 globally and in Hong Kong, we rescheduled our opening to September," a spokeswoman said. The hotel, which is welcoming guests now, is owned by real estate company CTL Group.

The average occupancy at hotels in Hong Kong has, in fact, risen, climbing to about 60 per cent during the four-day "golden week" public holiday at the start of this month from about 20 per cent on regular weekends during the pandemic. Hongkongers are trying out hotels in their city "for a sense of travel", said Michael Li, executive director at The Federation of Hong Kong Hotel Owners.

CTL was optimistic amid a gradual increase in local demand. "In the short term, we will continue targeting the local staycation and long-stay segments, while awaiting the eventual [return] of foreign travellers," the spokeswoman said.

The nine-room Tai O Heritage Hotel, which is operated by Hong Kong Heritage Conservation Foundation, enjoyed a full house over the long weekend. Meanwhile, property developer Sino Group, which also has hotels, said it saw staycations being a trend in the foreseeable future.

And as occupancy rates improve amid the rising popularity of staycations, and with more landlords willing to offload their holdings, investors might rediscover their appetite for this segment, according to Savills. "We are seeing selective signs of activity in the commercial market, with en bloc deals, hotels and even strata-title activity all showing a modest uptick," Peter Yuen, managing director and head of investment and sales at the brokerage, said.

The Federation of Hong Kong Hotel Owners' Li, however, said that even as hoteliers resorted to local guests, the income generated would only help to reduce losses, and will not match occupancy rates of, for instance, previous Golden Weeks, when these rates exceeded 90 per cent. He also said the improved performance might not be sustainable without foreign and international holidaymakers, as locals had less time off.

The Hari Hong Kong, operated by the city's prominent Harilela family, is among hotels expected to open over the coming months. The 210-room property in Wan Chai will open on December 12 as planned, according to its website.

The opening of Hotel Alexandra in Fortress Hill was deferred from early this year by Hong Kong tycoon Li Ka-shing's CK Asset Holdings. And while the 840-room property still does not have an exact launch date, it started selling food items such as mooncakes in July and was accepting bookings for buffets from December 1, and rooms from January 1 at more than HK$900 (US$116) per night, according to its website. The hotel said it had initially planned to open this year, and will continue to monitor the coronavirus situation and advise on opening date "at a later stage".

Other operators have adopted an even more cautious approach. The opening of the 206-room The Silveri Hong Kong in Tung Chung - initially slated for June 30 this year - has been pushed back to 2021. The property is part of the Citygate development, which is jointly owned by Swire Properties, Henderson Land Development, Sun Hung Kai Properties, New World Development and Hang Lung Properties. Progress in fit-out works as well as the pandemic will determine the opening date, a hotel spokeswoman said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

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