Hong Kong hoteliers may become vocal opponents of Airbnb

Hotels under pressure from tourism slump likely to oppose listing service as it grows in popularity

PUBLISHED : Monday, 08 August, 2016, 9:46pm
UPDATED : Monday, 08 August, 2016, 10:24pm

Hong Kong’s hotels, under pressure to fill their rooms amid the city’s tourism slump, may become increasingly vocal in opposing the growth of Airbnb, said Denis Ma, Jones Lang Lasalle’s Hong Kong head of research.

Mainland Chinese tourists, which make up almost 80 per cent of Hong Kong visitor arrivals, fell 8. 3 per cent in May to 4.45 million compared to the same month last year, according to tourism board figures. Hotel occupancy rates fell to 84 per cent in the first five months of the year, down from 85 per cent in the same period last year, the figures showed.

Adding to the woes of hoteliers, by next year another 10,000 hotel rooms are scheduled to be added to Hong Kong’s current supply of 74,000, according to government figures.

“If [Airbnb] starts to impinge on the margins of hoteliers, I think they’re going to start jumping up and down,” said JLL’s Ma. “The hoteliers aren’t exactly having a great time in the city right now.”

Ma said an increasing number of tourists are looking for “experiences” when they travel, meaning they want unique stays, such as those offered by Airbnb hosts.

If [Airbnb] starts to impinge on the margins of hoteliers, I think they’re going to start jumping up and down
Denis Ma, Jones Lang Lasalle

Airbnb flats are also cheaper, Ma said. Mid-range hotels in Hong Kong cost HK$857 a night, while data compiled by Inside Airbnb found the average Hong Kong listing available for HK$785 per night.

“When we’re talking about mid-scale or economy hotels, some of the Airbnb units are probably nicer,” Ma said.

As the number of Airbnb listings is still comparatively low in Hong Kong, Ma said it was unlikely to affect the availability of rental properties.

However, he noted that in some cases, properties would only need 50 per cent occupancy to achieve what they would otherwise be rented for on a monthly basis.

Take the example of the Hong Kong Airbnb host in Sheung Wan, who rents her 500 square foot flat for around HK$30,000 a month when her family members aren’t around. That’s a “fantastic deal” for the owner, Ma said.

“That area for a walk up of that size should be around HK$15,000 to HK$20,000, so that person’s getting 30 per cent more in terms of rental income,” he said.