HONG Kong is overflowing with tourists and businessmen these days, so it is no surprise that the territory's hotels have seen occupancy rates jump, allowing them to lift room rates. Furama Hotel Enterprises showed how much this activity means to the bottom line when it announced yesterday that profits for the six months to September 30 had soared 120 per cent to $46.6 million from $21.1 million. Naturally, the company credited rising occupancy and room rates at the Furama Hotel and Majestic Hotel for the impressive performance. It also helped that the Majestic, which opened in March 1992, had become profitable. Furama's improving prospects have not gone unnoticed by investors, who have bumped up the company's stock by more than 50 per cent in the past four months to $12 yesterday. The growth story is much the same for other hotel operators, who have seen average occupancy percentages climb close to capacity during peak seasons. This has led analysts to forecast that average room rates could climb between 10 and 20 per cent this year for luxury hotels and between 15 and 18 per cent for mid-range hotels. There are, however, a few disturbing signs on the horizon that could puncture the sector's momentum. Hong Kong's high inflation rate and rising labour costs have started to chip away at its competitive ability, meaning that tourists and business groups, who fill rooms during conventions, conferences and meetings, have started to consider other regionaldestinations such as Bangkok and Jakarta to cut costs. For the time being, however, this remains a minor consideration because Hong Kong's emergence as a regional finance centre will continue to make it a popular destination.