Stable HK room rates despite major hotel closure

Hong Kong’s industry is playing down the impact on the city’s room rates despite the closure of the 869-room Excelsior Hong Kong on March 31, and additional traffic driven by new infrastructure like the Hong Kong-Zhuhai-Macau Bridge (HZMB) and High Speed Rail (XRL).

China Travel Service HK Metropole International Travel Services’ deputy general manager, George Kai, said: “The closure of The Excelsior may have some impact, but it would not be dramatic given additional new supply. Moreover, visitors travelling through the HZMB are mostly same-day travellers, and the stronger renminbi means lower prices when converted into Hong Kong dollars. Although hotel rates may be outrageously priced during peak season, it is short-lived and the market has remained rational.”

Aerial view of Hong Kong CBD

Sincere International Travel Service chairman, Charles Ng, forecasts room rates for business events this year will be stable as more tour groups are switching to more affordable hotels in Zhuhai or Shenzhen with the improved accessibility by XRL and HZMB.

Ng said: “With thousands of new rooms coming online, hotel rates will be more or less the same as last year’s.”

Meanwhile, the Hong Kong Tourism Board recorded 959,000 overnight MICE visitors from China, down 2.9 per cent compared to 2017. The board’s spokesperson commented: “The total number of hotel rooms is expected to reach to about 84,000 in 2019, an increase of 2,500 from 2018. We believe the new hotels will help stabilise hotel room rates.”

STR Global reported hotel occupancy and ADR for Hong Kong in 2018 increased by 1.3 per cent and 8.3 per cent to 87.7 per cent and US$234.70 respectively.

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