Access Asia has published this updated report on the hotel industry in Hong Kong as part of the China Contact Market Research report series. The report covers the market and current state of recovery of the hotel sector in Hong Kong.
In the years prior to the hand-back to China, hotel room rates, flights and the cost of visiting rose to astronomical levels. Room rates may have since been slashed and two-for-one flight promotions run, but the image of Hong Kong as an expensive destination is fixed in many potential visitors’ minds. In 1999, hotel prices across Asia began to rise again as the region recovered from the economic crisis of 1997/1998. South Korea, Japan and Taiwan saw room rates rise by 32%, 38% and 30% in 1999 over 1998 in Euro terms. However, China and Hong Kong both saw continued falls in room rates, by 31.5% in Euro terms, though stabilised in mid-1999 and saw a slight recovery by year’s end. The cheapest Asian countries in 1999 were Malaysia and Kyrgyzstan. By the latter half of 1999, room rates in Hong Kong were stabilising and occupancy rates creeping up again. Though the industry has taken a bruising in the last few years the reality remains that hotels are property and property remains a major investment and asset in Hong Kong. In 2000, both room rates and occupancy were almost back to pre-1997 levels. There are also several bright spots on the horizon for Hong Kong’s hoteliers. Tourism numbers are climbing again while the Disney project is now going ahead. However, on the other hand, some claim that Hong Kong will be overshadowed by the rapidly emerging Hong Kong.