The effects of the anti-government protests are reverberating across Hong Kong’s travel industry and could be “catastrophic” for the entire economy if it persists, according to a leading hotel and leisure operator. “In the second half of the year, our operations in Hong Kong have indeed been affected by the complicated circumstances in the city,” said Fu Zhuoyang, chairman and executive director of China Travel International Investment Hong Kong, during a press conference on Monday where he announced an 11 per cent jump in first-half profit. Hong Kong-listed China Travel operates hotels, resorts, ticketing and transport services and theme parks in the mainland. “If the situation continues in the long-term, the results will be catastrophic, not only for [our company] but the whole of the Hong Kong economy.” The ongoing protests in Hong Kong have led to a sharp decline in the number of mainland tourists, dealing a heavy blow to the city’s hotel industry. Room rates have currently dropped to as low as HK$73 at three-star hotels in Tsing Yi and to less than HK$200 in the tourist district of Causeway Bay. The average room rate last year was HK$1,310 per night, according to the Hong Kong Hotels Association, which is yet to release figures for July. Figures from the Hong Kong Immigration Department show that the number of visitors from the mainland fell 5.5 per cent year on year in July to 4.16 million. This has led to a 5 percentage point decline in the occupancy rate at the city’s hotels to 86 per cent in July from a year earlier, according to the Hong Kong Tourism Board. “Over the past two months, profit and income generated from hotel operations has gone downhill. Across the whole of Hong Kong, hotel incomes have declined about 30 per cent on average over the past two months,” said Fu. “There has been a significant impact, but we believe the impact will be temporary.” China Travel’s financial controller Chen Hao said that the decline in tourists meant the company had to reduce room rates at its Metropark hotels in Mong Kok, Kowloon and Causeway Bay, and Kewgreen Hotel in Wan Chai. Over the past two months, profit and income generated from hotel operations has gone downhill Fu Zhuoyang, chairman and executive director of China Travel International Investment Hong Kong Fu said that the tougher outlook will see some belt-tightening in Hong Kong but there will be no lay-offs. “We will expand our businesses in the mainland for better growth and to maintain stability in overall operations.” China Travel said profit attributable to shareholders rose to HK$419 million (US$53.4 million) in the first half, from HK$379 million a year earlier. Two companies opened in Shenzhen and Beijing last year to provide tourism related services contributed to the bottom line. Revenue rose 7 per cent to HK$2.22 billion in the first half, from HK$2.08 billion last year. However, the company’s transport operations saw a 94 per cent decrease in profit to HK$4.19 million in the first half compared to the same period last year. This was a result of a 17 per cent decrease in profit from the company’s cross-border bus operator China Travel Tours Transportation Services Hong Kong as a result of overall increase in costs. Theme park operator China Travel sees 39pc rise in profit as tourist numbers and spending continue to soar The group’s associate Shun Tak-China Travel Shipping Investments, which operates passenger ferry services between Macau, Hong Kong and the Pearl River Delta, recorded a loss due to a decrease in number of passengers, following the opening of the Hong Kong-Zhuhai-Macau Bridge. “Hong Kong is a very important part of the Greater Bay Area, as well as a famous tourist destination. We believe passenger transportation operations are important, regardless of whether they take the bus or the ferry, and we will make further efforts to coordinate the operations,” said Jiang Hong, executive director and general manager of the company. China Travel’s shares rose 2.5 per cent to close at HK$1.23.