Hotel shortage boosts demand for serviced apartments, prompting office block conversions

"Serviced apartment, not a hotel." That, recalled Joseph Bautista, was his wife's response when he asked about her choice of accommodation in Hong Kong during their planned one-month business trip to the city.

"My wife loves to cook and there's no way she can do this even if we stay in a luxury hotel," explained Bautista, who is now in town setting up an import-export venture between his Manila-based company and several firms in Hong Kong which source products from China.

"She's actually very happy with the deal that we've got because the package is only about HK$20,000 for a month, which is cheaper than staying in a hotel. And what makes the serviced apartment more attractive is the fact that it's just a few steps from the Wan Chai MTR station which makes travel convenient for us."

Aside from long-staying visitors like the Bautistas, a growing number of locals, including homebuyers who delayed their purchases after the government's property cooling measures, are looking to serviced apartments for accommodation, analysts say.

In response to this growing demand, more and more property owners are converting underused office buildings into serviced apartments to earn more rental income.

In this way the government's cooling measures have provided an unwitting boost to the serviced apartment sector, the analysts say.