Landlords of serviced apartments are offering rental discounts of up to 30 per cent to prop up sagging occupancy rates as the number of free-spending expatriate business visitors dwindles. Many say they are locked in fierce competition not only with other serviced-apartment landlords, but also with hotels and even private home owners to sign tenants to long-term leases. Some said several hundred new serviced apartments due to come on to the market in Central and Western districts in the next few months also could increase vacancy rates. At Eaton House, which runs three mid-priced serviced-apartment complexes in Happy Valley, it is possible to negotiate a discount of as much as 30 per cent on a six-month lease, according to assistant sales manager Ricky Pang. 'The leasing situation is getting really bad,' he said. A room which would have leased for about $29,965 per month at the start of the year now was available for just over $20,000 per month. Last year, the discount available would not have been more than 15 per cent. Occupancy rates at Eaton House, which is owned by Great Eagle Holdings, were about 80 per cent last year but were now hovering at 70 per cent, he said. Landlords expect the number of tenants for serviced apartments to fall in the next six to 12 months as the economic slump worsens. As a result, they said they were forced to be more flexible on leasing terms. Worse still, the downturn in occupancy rates was likely to be long term. Virtually all serviced-apartment landlords are offering rent discounts or extra perks to lure tenants into long-term leases. At the Convention Plaza Apartments in Wan Chai, rents which can range between $30,000 per month and $85,000 per month have been cut by about 30 per cent. A spokesman for the leasing agent said the cut in rents was necessitated by the fall in the occupancy rate from 92 per cent at the start of the year to about 85 per cent in August. 'Company directors are spending less on luxury accommodation for their staff,' the spokesman said. At the mid-priced Jaffe Court in Wan Chai, monthly rents had been cut by as much as 30 per cent also, manager Patrick Wong said. Rate cuts were initiated to attract business from hotels, which were entering their high season. However, with the downturn in the tourist traffic, Mr Wong said hotels would continue to cut room rates to attract tourists. Some hotels already had cut rates by 20-30 per cent, he said. Jaffe Court had to do the same in order to attract potential tourist traffic away from the hotels, even if it was just on a daily basis. According to landlords of some serviced apartments, hotels are a direct threat to their business in so far as they are now offering increasingly attractive monthly packages. Rents for a studio at the Hong Kong Parkview had been cut by 20 per cent, from $70,000 per month to $56,000 per month, agents said. Slightly lower rental cuts applied to more luxurious studios. A Parkview spokesman said it had lost some tenants to private residential landlords due to the fall in luxury rents around the territory. Even better-known serviced-apartment complexes, such as Swire Properties' Atrium and The Parkside, have not been immune from the downturn in leasing business. 'We are facing a challenging market, and inevitably as we go through a quiet market, the occupancy rate has dropped a little,' a Swire spokesman said. 'In light of the market situation, we have been more flexible on rental packages given to existing and prospective tenants - especially our corporate clients - to reflect their past support,' she said. At the De Ricou in Repulse Bay, which is run by the Hong Kong and Shanghai Hotels Group, a spokesman said that the rents were being driven by market fundamentals. 'I can't give an exact figure on rental corrections,' she said, 'But we are being more flexible to existing clients and people on the waiting list.' However, a spokesman for the Grand Plaza Hotel said it had no intention of changing its monthly rental charges because its occupancy rate had remained stable during the economic downturn. Being located in the Quarry Bay area, it did not face a lot of competition from other serviced-apartment providers, the spokesman said.