Hong Kong’s hotel valuations drop, vacancy rates soar, as business travellers and tourists avoid city amid street protests
- The average room rate at three-star hotels fell 46 per cent to HK$446 (US$57) for the week that ended on October 27, according to data by accommodation platform WebBeds
- Tourists and duty-free shoppers from mainland China led the exodus, with their number of room nights falling 24 per cent during the week
Investments in new hotels grounded to a halt in Hong Kong, as valuations fell 10 per cent amid record vacancy rates caused by business travellers and tourists who are avoiding the city’s anti-government protests.
The average room rate at three-star hotels fell 46 per cent to HK$446 (US$57) for the week that ended on October 27, from US$105 a year earlier, according to data by accommodation platform WebBeds. Tourists and duty-free shoppers from mainland China led the exodus, with their number of room nights falling 24 per cent during the week, compared with the same time last year.
“It's definitely been a tough time for Hong Kong in the last four months,” said Robin Rossmann, managing director at data and analytics specialist STR, at the Hotel Investment Conference Asia-Pacific, adding that the declines in revenue per available room, or RevPar, have accelerated to about 50 per cent in the last two months, from 10 per cent at the start of Hong Kong’s social unrest. “There is definitely no doubt that what has happened has had an impact. Perceptions really are all [that matter]. ”
It’s a woeful time to be in the hotel business, especially for those that operate premises near the flash points of clashes between anti-riot police and anti-government protesters. Over the past few weeks, radical protesters have taken to arson and vandalism, destroying shops, bank branches and restaurants linked to mainland Chinese owners or investors.