Hotels bask in booming economy (hktdc.com)


	At the plush Four Seasons, in addition to near-capacity room occupancy, guests are spending on spa treatments and fine dining

	James Lu, Executive Director of Hong Kong Hotels Association

	Peter French, General Manager of the Mandarin Oriental Hotel

	William Mackay, Vice-President and General Manager of Hong Kong’s Four Seasons Hotel

Hong Kong hotels are basking in a bumper 2006, a year that is exceeding projected business forecasts to achieve near-record results.

As business and leisure travellers flock to Hong Kong, occupancy rates across all categories of hotels and guesthouses leapt to 89 per cent in August, three percentage points higher than for the same month in 2005. In the bustling tourist areas of Kowloon (Yau Ma Tei and Mong Kok), hotels recorded a near-capacity occupancy of 93 per cent.

Demand for beds continues to increase, despite the fact that Hong Kong’s hotel room supply grew by 3.4 per cent between August 2005 and August 2006. The average room rate across all hotel categories also increased to HK$920 (US$118), 18.3 per cent higher than in August 2005.

Good news all round

James Lu, Executive Director of Hong Kong Hotels Association (HKHA), said hotel operators had expected a bumper 2006, but the results exceeded expectations.

“Firstly, all major (tourism) markets registered double digit growth this year, and in particular the MICE market (meetings, incentives, conferences and conventions, and exhibitions) has done exceptionally well,” Mr Lu said.

“We’ve had more events in Hong Kong and each event has had more participants, both in exhibitors and buyers.

“The positive business performance in both Hong Kong and China has triggered a strong surge in business travellers, while the stable economies of the region have resulted in increased intra-Asia travel in both business and leisure categories.”

Stellar opening

Hong Kong’s plush new Four Seasons Hotel, which recently completed its first full year of business, had “fulfilled our expectations and more”, Vice-President and General Manager William Mackay said. “In fact, this opening remains one of the most economically successful Four Seasons has ever had.”

“Besides the hotel’s own strength in terms of location, service quality and produce quality, we were fortunate to open when the market was just sizzling, and it has remained sizzling ever since,” said Mr Mackay, whose hotel is running very close to capacity.

Going forward, he said the outlook is extremely positive given a broad range of indicators ranging from office absorption rates and rentals, to residential rentals, business registrations in Hong Kong, and unemployment at a record low.

“The economy here is so well managed there is not the danger of overheating,” Mr Mackay added. “We are in an almost ideal business situation. And as people are economically successful, so the brands and suppliers of luxury products also benefit. There is a feelgood factor that works well not only for room occupancy, but because people feel comfortable spending more on spa treatments and fine dining.”

Positive outlook

Peter French, General Manager of the Mandarin Oriental Hotel, which reopened last month following a HK$1.09 billion (US$140 million) refit, agrees. “For the past three years Hong Kong has experienced a stable business demand from all of its major markets, both long haul and short haul. The outlook going forward is very positive, predominantly from the Asian markets and of course in particular, China,” Mr French said.

“On the back of strong room occupancy, room rates have returned to levels not seen since 1997.”

On current figures, HKHA expects to end the year with overall room occupancy of 86 - 87 per cent across all hotel categories – close to the record 88 per cent achieved in the late 1990s and again in 2004.

With an additional 8,000 hotel beds coming on stream in 2007, Hong Kong is positioning itself for a further influx of visitors resulting from major attractions such as Disneyland, Nong Ping 360 Cable car and the Hong Kong Wetland Park, and by business tourism drawn to world-class events at the Hong Kong Convention and Exhibition Centre and AsiaWorld-Expo.

“Hong Kong is well entrenched as a must-visit destination, both for doing business and for leisure,” HKHA’s Mr Lu said. “The mood among hotel operators is buoyant.”