- Revenue per available room dropped by 40 per cent to 50 per cent year on year in November and December
- As Alva Hotel by Royal is launched in Sha Tin, team already under pressure, executive director says
Sun Hung Kai Properties, Hong Kong's biggest developer by value, said revenue at its hotels division had plummeted by up to half in November and December, as the city's tourism industry struggled to stay afloat amid seven months of anti-government protests and the US-China trade war.
Revenue per available room dropped in these two months by 40 per cent to 50 per cent year on year, Adam Kwok, the company's executive director, said on the sidelines of the launch of Alva Hotel by Royal in Sha Tin on Friday.
The 350,000 sq ft hotel was built at the cost of about HK$2.8 billion (US$359 million), including the cost of land.
"The hotel market is poor, there is no doubt about it … there is definitely a hit. But there is no reason to (not open) the hotel after planning for so long," Kwok said. "I think we are in a difficult situation, so we can only try our best to operate it. The team is under a lot of pressure."
Quite a few package tours that booked with the company's hotels previously had cancelled their bookings. "But we always encourage hotel staff to try hard for all possibilities (of bookings)," he said.
Kwok noted that last week Sino Hotels said in a filing to the Hong Kong stock exchange that it expected its net profit for the five months ending November 30 to drop by 94 per cent amid a "challenging business environment".
The anti-government protests had left local hotels facing "great challenges", said Raymond Kwok, the company's chairman and managing director, and Kwok's uncle.
He said the current situation reminded him of the June 4 Tiananmen Square crackdown in 1989. He was overseeing the Royal Park Hotel, which had opened just two months after the incident.
Hong Kong hoteliers issue SOS as plunging rates reach US$9 a night
"People were not in a good mood at that time. It was like (what we have) now. I still remember, we all had a heavy heart," Raymond Kwok said. "As long as we work hard, we can definitely touch a new high … as long as we survive these few years."
Adam Kwok said he would urge the government and Trade Development Council to implement support measures used during the Sars (severe acute respiratory syndrome) outbreak in 2003.
The situation now was similar to that during the outbreak, he said. "I will (ask) the secretary (for Commerce and Economic Development) when I see him. I think this is very much necessary. They should refer to measures used during the Sars outbreak. At that time, every tourist would get cash coupons of HK$100 or HK$150 per day," Kwok said.
More Hong Kong hotels convert to co-living spaces to improve rental yield
"Now is quite a cold winter. I think tour groups from mainland China will be diminishing and do not dare to come. The tourism industry really needs help. All peers are transforming to do more local business. It is not enough to just rely on tourists," he added.
He said the company had not forced its staff to go on unpaid leave, or resorted to mass lay-offs. He added that the company's High Speed Rail project will not have a hotel as it "already has about 7,200 rooms in Hong Kong, which is already quite a lot of exposure".
Sun Hung Kai's completed hotels in Hong Kong occupy 3.9 million sq ft of gross floor area, or 11.9 per cent of its total completed investment properties in the city.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
