Four in 10 Hong Kong hotel staff may lose jobs as coronavirus outbreak deters the few remaining visitors still braving the city’s protest rallies

Unemployment rate in Hong Kong’s hotel industry could reach “up to 40 per cent” due to Wuhan coronavirus and protests, hoteliers say

While the larger hoteliers could afford to cut their rates, the smaller operators cannot afford to run their businesses below cost

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Pedestrians wearing masks walk out of a ferry pier terminal in the Tsim She Tsui district in Hong Kong on Wednesday, Jan. 29, 2020. Photo: Bloomberg

Published: 12:00pm, 3 Feb 2020Updated: 10:37pm, 3 Feb 2020

Four in 10 of Hong Kong’s hotel staff may lose their jobs in the coming months, as travel restrictions against the coronavirus outbreak could become the final nail for an industry that is already struggling from shrinking tourism after nearly eight months of anti-government protests.

The unemployment rate in the industry, which employed 44,500 people in the city as of the end of 2019, could soar to 40 per cent, said Edwin Leong Siu-hung, founder of property developer Tai Hung Fai Enterprises, who counts four hotels in his real estate portfolio. Small hotels and family-run inns would be particularly susceptible to the downturn in business, he said.

“Family-run guest houses and small hotel operators may be forced to close,” said Leong, Forbes magazine’s 23rd richest man in Hong Kong last year, with an estimated net worth of US$4.8 billion. “Large hotel operators will find ways to cut costs.”

The downturn in the hospitality industry would add to the woes of a city that is already mired in its first technical recession in more than a decade, as tourists from mainland China – whose profligate shopping of everything from luxury goods to insurance make up an estimated 5 per cent of Hong Kong’s economic output – stayed away during the eight months of anti-government protests. The latest 14-day quarantine and travel ban for any visitor from Wuhan has further deterred travelling.

The unemployment rate in the hotels and accommodation industry was 3.4 per cent, or around 1,500 people, in the fourth quarter of 2019, nearly double the jobless rate a year earlier, according to the government’s General Household Survey which sampled 74,000 individuals.