Owners of underperforming hotels see redevelopment as a quick fix to city’s housing woes after CK Assets’ proposal
- Hotel owners say room occupancy rates continue to languish despite a recovery in tourists from the mainland
- Non-core hotels are not seeing high occupancy rates despite the opening of the Hong Kong-Zhuhai-Macau Bridge and high-speed railway
An increasing number of hotel owners in Hong Kong’s non-core areas are considering rebuilding their property into residential use while viewing it as a quick fix for the city’s perennial housing shortfall, following CK Asset Holdings’ proposal to redevelop its 1,100 room hotel into a housing project.
“Why on earth do we have so many rooms in industrial and outlying areas that get so few tourists while so many Hongkongers are still waiting for a chance to buy their own house?” asked William Cheng Kai-man, chairman of Magnificent Estates, which owns eight hotels, six of which are in the city’s prime districts, including Causeway Bay, Sheung Wan and Tsim Sha Tsui.
Hotel room rates in the city’s outlying areas have been hit by a sharp decline in mainland group tours after such shopping sprees were banned in 2015 as they contributed about 70 per cent to the occupancy of these non-core area hotels, according to Cheng.
Hotel owners fear their occupancy rates continue to languish despite a recovery in the number of tourists from the mainland.
“[Many] rooms get last-minute cancellations and price competition in these areas is unhealthy,” Cheng added.
Rooms at the 882-unit, three-star Rambler Oasis Hotel in Tsing Yi, owned by CK Asset, were available for as low as HK$380 per night on Monday, according to booking.com.
Despite the recovery in visitor arrivals, tourism sector legislator Yiu Si-wing pointed out that more than half of the tourists from the mainland did not stay overnight in Hong Kong and just came for day trips for shopping or business.