Hotels take a bearish view of the new year
Local hotel owners do not expect occupancy rates to rise this year and they believe room prices will likely increase at a slower rate than in 2011 due to greater room supply and the uncertain global economic outlook.
The Federation of Hong Kong Hotel Owners expects occupancy rates this year to be similar to last year's - about 85 to 86 per cent on average for the full year, says Michael Li Hon-sing, executive director of the federation.
Room rates are expected to rise by 8 to 10 per cent this year, slower than the 15 to 16 per cent pace last year.
'This is because the growth in 2011 was strong,' Li said, adding that the uncertainty about Europe's debt crisis would affect the global economy and dent consumer spending.
'Therefore, we remain cautious on the outlook for the hotel market this year even though we still see strong demand for hotel rooms at the moment.'
Although the number of visitors to the city is expected to surge this year, Li said that would be offset by thousands of new hotel rooms which may be available this year.
However, Li said he remained optimistic about the 'short-haul' visitors market, particularly from the mainland, as well as from new markets such as Russia and India.
Long-haul travelers are more likely to be from America, Canada, Australia and New Zealand, than from Europe, he said.
Nicholas Yim Kwok-ming, executive director of the Sino Group of Hotels, said its four hotels had increased their room rates by about 8 per cent since January 1.
The group's occupancy rate rose more than 12 per cent during this past Christmas from a year ago, and climbed three percentage points to 87 per cent on average last year, Yim said. For this year, the group aims to boost its occupancy rate by a further two to three percentage points.
Figures from the Hong Kong Tourism Board showed that the average hotel occupancy rate reached 89 per cent in the first 11 months of last year, 3 percentage points higher than the previous year.