The Excelsior was the first hotel in territory to put together a handover deal, but most hotels were heavily booked for the period even before their packages were decided, by guests prepared to pay any price.

For the hotels, the handover to Chinese rule is proving to be a bonanza, on a par with pressure on hotels in cities hosting global events like the Olympic Games.

'There is no precedent here in Hong Kong for this level of demand,' explained Bruno Dedual, manager of the Hotel Furama-Kempinski. 'I hope all these guys made airline reservations.' 'The only constraint is the airport,' said Julia Gilkes of the Hong Kong Tourist Association. The highest record for arrivals at Kai Tak was 106,631 on February 25 this year.

Some tourists are expected to fly to Macau's new airport and make their way to Hong Kong by ferry; more will come overland.

Typically, during the peak tourist period the territory receives 150,000 visitors daily, and there are bound to be more over the handover period.

Tempted by the opportunity, most hotel managers are requiring guests to book for several nights, and pay months in advance. Many hotels are raising their prices.

'Hong Kong is a free market,' pointed out Peter Randall of the HKTA. 'Hotels set rates according to the situation. Wherever there are major events, it is inevitable that prices go up.' 'To try to make a windfall on a six-day period, I think, is not prudent,' cautioned Geoff Garside, manager of the Marriott Hotel, which has a six-night package. 'Atlanta gave everybody an idea of what negative publicity can come out of that. We want to be seen as reasonable and not opportunistic.' The two Shangri-La hotels in the territory are conspicuously not imposing a minimum length of stay, or raising their prices. 'I think it would be a bit unfair,' considered spokesperson Joanne Watkins. 'Many are regular clients, we're looking more in the long term. We've created a great deal of goodwill in this way.' Some 34,305 rooms in 89 hotels will be available in the territory in June 1997, and competition for beds is intense.

'The supply of rooms is not sufficient to satisfy demand at busy times of the year,' said the Excelsior's Gibbs.

At least one ship, the Star Pisces which normally takes Hong Kong tourists on three-day cruises to Chinese ports, will be in Victoria Harbour to provide additional accommodation for handover visitors, according to the HKTA.

The 746-cabin ship can accommodate up to 2,192 passengers, with 700 crew. Docked at the Ocean Terminal, guests could have a superb view of a fireworks display to mark the transition - but only if the harbour is the focus of celebrations.

The management teams of all the hotels and the Star Pisces have the same problem, none know what form the festivities will take.

'We started planning our handover events in early 1995,' explained Bruno Dedual, manager of the Furama-Kempinski. 'Everybody was really motivated with all kinds of plans. Unfortunately we ran into a problem, we couldn't get any information from the Government.' 'We still don't know what's going on,' said Liam Lambert, manager of the Mandarin Oriental.

In their planning, many hotels are careful to avoid offending either the departing British or the arriving Chinese, short of lowering the Union Jack and raising the Special Administrative Region and Chinese flags.

'For some people the handover is going to be a very joyful occasion,' noted Dedual. 'For others, it's going to be nostalgic.' 'As a high-profile hotel, you have to be politically aware,' Lambert pointed out. 'But you must never allow it to affect how you do business. ' The handover is one of several major events for hotels next year. The International Rugby Sevens will be held in March, and in September a World Bank meeting will attract about 15,000 delegates.

'The focus put on these events causes people to stay away,' said the Marriott's Garside. 'Travel agents are saying Hong Kong is full for 1997. We're telling people we do have space the rest of the year.' Some of the top hotels in Hong Kong are offering the following handover packages: The Mandarin Oriental: Join Margaret Thatcher, and news organisations NBC and ITN. Rates for a six-night minimum stay range from $28,997 to $81,997, meals extra. According to a spokesperson, Lady Thatcher was one of the first people to express an interest.

Guests will receive commemorative gifts each day, some of which may become collectors' items, said manager Liam Lambert. On the first day of the SAR, all guests will be invited to a Chinese-style reception.

The Peninsula: The handover period at the Peninsula has been fully booked since 1994. The six-night package ranges from $33,860 to $83,050, including daily American breakfast and airport pick-up.

'We've marked it up slightly just to take inflation into account,' said spokesperson Sian Griffiths. 'Normally we're the most expensive hotel, but we're not the most expensive over the handover.' Guests will be able to enjoy a party on June 30, along the lines of a New Year's Eve bash, according to manager Peter Borer.

The 11-room Peninsula suite, complete with baby grand piano and kitchen (for guests with private chefs), has already been booked for the handover period. A spokesperson declined to reveal for how much.

J W Marriott Hotel: A minimum six-night stay, with prices ranging from $24,800 for a mountain-view room to $67,380 for a suite facing the harbour. The giant Presidential and Vice-presidential suites have been booked 'by a VIP', a spokesperson said.

The American television network CBS is among the organisations staying for the handover.

The Furama Kempinski: A four-day package costing between $15,562 for a room with a Peak view, and $33,200 for a harbour suite. 'Very few businessmen stay for six days at any time in Hong Kong, that's why we decided on four days,' said manager Bruno Dedual. 'Obviously business has to go on immediately after the handover.' The deal includes daily breakfast, two dinners, free laundry, airport transfer, and a hotel souvenir.

The hotel's exterior will be decorated. 'These decorations have never been done before. The designers think it's fantastic,' enthused Dedual. 'It's going to cost us a bomb.'