Cash crunch sees 'The Y' move upmarket

PUBLISHED : Sunday, 07 January, 2007, 12:00am
UPDATED : Sunday, 07 January, 2007, 12:00am

YMCA to relaunch two hostels as international hotels to maintain funding for social programmes

If you think the Chinese YMCA of Hong Kong provides budget accommodation for travellers of modest means, think again - its two hostels, in Yau Ma Tei and Wan Chai, are to become four-star hotels.

The group says going upmarket, which will mean room prices rising by up to 100 per cent, is the only way of raising revenue to support its social services in the wake of government funding cuts and growing competition in the hotels sector.

Other options - such as pay cuts or layoffs - are unthinkable, says general secretary Lawrence Yick Kar-lim.

'We help people find jobs. How can we lay off people,' he said.

The new hotels will not feature the YMCA logo or name.

'If we keep the name YMCA, it still gives people the impression that it is a hostel for backpackers,' said Alex Wu Shui-lun, general manager of YMCA International House in Yau Ma Tei, one of the hostels to be upgraded.

No names have been finalised, but the upgraded hostels will likely be renamed 'international hotels' and relaunched next year.

'Each year, we cannot cover our expenses [from government funding],' said Mr Yick. 'We have no choice but to revamp our hostels to boost income. If we don't have money, it will affect our service development.'

There are three YMCA hostels in Hong Kong.

The hostel in Salisbury Road, Tsim Sha Tsui, which is run separately by YMCA Hong Kong, a sister organisation to the Chinese YMCA of Hong Kong and which is not subsidised by the government, will remain unchanged. But YMCA International House in Waterloo Road, Yau Ma Tei, and Harbour View International House in Harbour Road, Wan Chai, will undergo extensive renovation.

The Chinese YMCA relies on government subsidies to fund 60 per cent of its wide-ranging social services, from shelters for the mentally disabled to outreach services for young people and the elderly.

It received about HK$96 million in the current financial year from the government, a figure it said has remained relatively constant since 2001 and about HK$10 million less than it received in annual support before that date.

In 2001, the Social Welfare Department implemented a lump-sum grant system for subvented groups. Instead of paying all expenses and wages of the groups, it pays a lower lump sum.

Mr Wu said the revamp was partly driven by the need to counter competition from other hotels.

'More new hotels have opened in the past two years. We will lose customers if we don't upgrade ourselves, and our income will keep on dropping,' he said.

Mr Wu said YMCA International House's cheapest room was HK$300, but this may rise to HK$500 or even HK$600 in future. Suites, which currently cost about HK$2,680, may jump to HK$4,000. The Wan Chai hostel charges slightly higher rates. But the Yau Ma Tei hostel will not cease catering for backpackers entirely. Mr Wu said they would keep its 10 basic single rooms with shared bathrooms.

Microsoft executive Silas Yu, who has lived at the Yau Ma Tei hostel for over three years, said he liked the personal touch that its current hostel staff provided and was worried about losing it.

'I have mixed feelings,' he said. 'Since the hostel is in a good location and is professional, it has great potential to be a hotel. On the other hand, I am worried that it will lose its personal service if it is changed to a hotel.'