THE performance of hotel stocks improved this week, with most making gains.
Mandarin Oriental made an impressive comeback, with a 10.6 per cent gain from $7.05 to $7.80.
According to Standard Chartered Securities, the hotel sector is expected to recover this year. The firm forecast that average occupancy rates would increase from 82 per cent in 1992 to 86 per cent this year.
Two major factors behind the upturn are the increase in the number of visitors to Hongkong and the relatively slow development of new hotel rooms.
''Many developers are building office buildings because they feel they offer greater stability, fewer headaches and higher value income streams than hotels,'' said Standard Chartered analyst Dan Sherman.
''Based on our forecast and data from the Hongkong Tourist Association, the supply of new hotel rooms will grow at only three per cent to four per cent per annum from 1993 to 1995.'' He said the perfect stock to take advantage of the coming upswing would be one that made a high proportion of its earnings from hotels in Hongkong.
