- Numbers of tourists arriving drop to daily average of 3,000 in mid-February from 200,000 in same month last year
- Occupancy rate drops below that of Sars in 2003, which stayed in double digits even at height of health crisis
Hong Kong's hospitality sector faces "a critical period of life or death" in February and March as tourist arrivals crumble during the coronavirus outbreak, a hotel owners' group has said in a plea for urgent government aid.
The Federation of Hong Kong Hotel Owners, which has 86 members running about 200 hotels and employing some 80,000 workers, said on Wednesday that occupancy as a percentage now averaged in the single digits " far worse than experienced during the severe acute respiratory syndrome (Sars) outbreak in 2003.
Its executive director Michael Li Hon-shing urged Financial Secretary Paul Chan Mo-po to ease the burden on the industry by exempting owners from paying rates and government rent for one year, and offering tax concessions and one-off cash subsidies in his budget next week.
He added the hospitality sector was at the epicentre of Hong Kong's tourism slump, but had been left out of the government's relief measures worth HK$28 billion (US$3.6 billion) announced recently to deal with the outbreak.
"So few rooms are taken up that our members no longer gauge occupancy by percentage, but by room numbers," Li said. "Now, many full-time hotel staff are taking no-pay leave, I will not be surprised to see businesses closing down next. February and March will be the critical period for their life and death."
Tourism is one of Hong Kong's four pillar industries, contributing to 4.5 per cent of the city's gross domestic product (GDP) in 2018.
Amid the virus outbreak, which originated in the mainland Chinese city of Wuhan and causes the disease known as Covid-19, Hong Kong tourist arrival figures slowed to a daily average of 3,000 in the middle of February from the daily average of 100,000 last month and 200,000 in February last year.
Hong Kong taking 'bigger hit' than during Sars as tourism suffers from 'unprecedented downturn'
Hong Kong Tourism Board said on Tuesday the current situation was worse than during the peak of the Sars outbreak in May 2003 when 10,000 people were visiting Hong Kong on average each day and occupancy remained in double digits.
In the middle of February, only 20 per cent of tourist beds were taken up, with a 25 per cent cut in flights and the cancellation of 38 cruise tours in the city, it added.
A total of 47 jurisdictions have issued travel advisories against visiting mainland China, while 28 included Hong Kong as well.
"Most of the checkpoints have been closed since late January. We do not know when the outbreak will stop," Li said, adding that news of hotel closures would follow.
The federation includes members of global hoteliers such as Hyatt, J.W. Marriott, Shangri-La, Regal, Mandarin Oriental, Ritz-Carlton, and Peninsula.
Since the outbreak worsened during the Lunar New Year holiday in late January, many airlines have suspended or reduced flights to Hong Kong while the government eventually shut down all but three of its border checkpoints with the mainland. Only the airport, the Shenzhen Bay Port and the Hong Kong-Zhuhai-Macau Bridge are still operating.
Tourism and hospitality stakeholders were particularly hard hit by a free fall in the number of visitors, as 78 per cent of the city's total arrivals came from mainland China.
So few rooms are taken up that our members no longer gauge occupancy by percentage, but by room numbersMichael Li, Federation of Hong Kong Hotel Owners
Li said the outbreak added to the tourism downturn since June last year caused by anti-government protests. Hotel room rates and occupancy were battered in December and dropped more than 40 per cent year on year, while revenue per available room, a benchmark for hotels' profitability, plunged nearly 60 per cent, he said.
At the five-star InterContinental Grand Stanford Hong Kong in Tsim Sha Tsui, a Post reporter only counted 10 people, some of them being Cantonese-speaking, walking past the lobby in 20 minutes on Wednesday afternoon.
One cleaner with the hotel said there were noticeably fewer guests compared with normal business days.
"There is nothing we can do. Fewer people are coming as the border is (partially) closed," she said.
Airport suffers worst January in five years amid protests, coronavirus
Accountant Victoria Rojaskaya, 52, is on a two-day business trip in Hong Kong from Russia and paid just HK$400 for a two-night hotel room in Yau Ma Tei.
She said booking the accommodation online was cheap.
"I am not worried about catching the coronavirus in Hong Kong," she said, while strolling along popular tourist attraction Star Avenue in Tsim Sha Tsui.
Hong Kong hotels target staycations as slump shows no signs of ending
Meanwhile, the tourism association called on the government to help coach businesses in the city as passenger figures dropped to "almost zero".
"The whole industry faces survival problems immediately," it said.
The sector employs 15,000 workers and operates 7,100 coaches. Some had capital funding issues and could shut down at any time, it said.
It called on officials to provide a cash allowance to firms, offering at least HK$150,000 for each coach they operate to maintain cash flow.
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