Shopkeepers in the Peninsula Hotel and Kowloon Hotel in Tsim Sha Tsui say Hongkong & Shanghai Hotels' 15 per cent rent rebate offer to reflect the downturn in the economy is inadequate. 'The 15 per cent they are offering is not enough,' one merchant in the Kowloon Hotel said. 'A 30 to 40 per cent rebate would be more like it.' A merchant in the Peninsula Hotel - which sports famous brands such as Chanel and Louis Vuitton - said he had expected a better deal on rent considering the 30 to 40 per cent downturn in business, especially from Japanese tourists. Hongkong & Shanghai Hotels sent a letter to its retail clients at the Peninsula Hotel, Kowloon Hotel and Peak Tower offering them a rebate on their rent to help compensate them for the downturn in sales from their outlets. Some retailers in Tsim Sha Tsui estimated business had fallen off as much as 60 per cent during the tourist slump after the handover. A spokesman for the hotel group said that in light of the current market downturn 'we have given a temporary rebate to retail tenants'. The hotel group said the offer was retroactive to April 1. 'Tenants will continue to pay the full rent and then we will give them the rebate,' a Hongkong & Shanghai Hotels representative said. She said setting the rebate figure at 15 per cent was a commercial decision taken by the company. 'It is up to each individual landlord to decide what it will offer,' she said. The 15 per cent rebate would apply to tenants with two or more years left in their leases. 'Those leases up for renewal later this year will be renegotiated subject to prevailing market conditions,' the spokesman said. One merchant said a much larger rebate of 50 per cent was offered to tenants in the Kowloon Hotel while renovations were going on last year. He wondered why a similar sized rebate did not apply this time. The hotel said that rebate was compensation for the noise and general disruption to tenants while renovations were taking place. According to some retailers, the rebate should have been in the neighbourhood of 30 to 40 per cent to reflect the current market situation. The Hongkong & Shanghai Hotels spokesman defended the 15 per cent rebate. 'The level of rebate was predicated on a number of factors,' she said. 'Whilst we had no obligation to vary the rents under existing contracts, we felt this was a fair offer under the present market conditions.' Meanwhile, Hongkong & Shanghai Hotels' stock fell 6.3 per cent to a five-month low when news of the rebate the firm was offering shopkeeping tenants reached the market. Shares in the company fell 35 cents to $5.20 at the close of trading yesterday.