Hong Kong government plan to use hotels for temporary housing will help struggling owners, says industry veteran

Name: Tiny 290sq ft temporary housing a welcome upgrade for some low-income Hong Kong families
Uploaded: 2020-12-01T03:30:16.000Z
Duration: 4 min 11 s
Description: Tiny 290sq ft temporary housing a welcome upgrade for some low-income Hong Kong families

Owners in noncore areas will be happy to rent their hotels to the government, says William Cheng of Magnificent Hotel, who suggested the idea to Carrie Lam

Cheng says hotels in noncore areas could accept a monthly rent of between HK$4,000 and HK$4,500 per room

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William Cheng Kai-man, chairman of Magnificent Hotel Investments, says hotel owners in noncore areas would be happy to rent their hotels for use as temporary housing. Photo: Xiaomei Chen

Sandy Li

Published: 11:30am, 1 Dec 2020Updated: 7:29pm, 1 Dec 2020

The Hong Kong government’s plan to use hotels and guest houses for temporary housing has been welcomed by a veteran hotelier, saying that it could prevent some operators from going under during these trying times.

“There are many hotels in noncore areas such as Tsuen Wan, Kwai Chung, Tsing Yi and Tin Shui Wai, with hundreds of empty rooms, which can be used as transitional housing immediately and help these operators to stay afloat,” said William Cheng Kai-man, chairman of Magnificent Hotel Investments, who proposed the idea to Chief Executive Carrie Lam Cheng Yuet-ngor in October.

During her annual policy address on November 25, Lam said the government will launch a pilot scheme to subsidise non-government organisations to rent rooms in hotels and guest houses for use as transitional housing, with funding to be sought from the Community Care Fund. While no date has been set for the launch of the proposed scheme, it is expected to be implemented soon.

In Hong Kong, the world’s most expensive property market, the average waiting time for public rental housing has risen to 5.6 years, and the number of family and single elderly applicants has grown to 156,400. Many are forced to live in poorly maintained subdivided flats in rundown urban buildings during the long wait.

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Tiny 290sq ft temporary housing a welcome upgrade for some low-income Hong Kong families

According to JLL, there are 308 hotels with 85,238 rooms and 1,481 guest houses with 12,521 rooms in the city. The overall average occupancy rate for hotels was 52 per cent, and 56 per cent for guest houses in September, JLL added, noting that the lack of tourists because of the coronavius pandemic was badly hurting the sector.

“If the government can utilise the lower class hotels and guest houses, it will provide a boost to this struggling sector,” said Hannah Jeong, head of valuation and advisory services at Colliers Hong Kong.

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