Hong Kong’s hospitality and tourism industry has taken a beating as social unrest continues, and while hoteliers don’t think that business in 1Q2020 will pick up anytime soon, they have indicated their willingness to hold, or slightly increase, their rates for 2Q2020.
According to Wharf Hotels, president, Jennifer Cronin, the city continues to be a major global business hub and is still very important regionally – evident from the recent Alibaba Hong Kong listing, reportedly the world’s biggest stock offering this year.
She added that throughout the RFP process for 2020, corporate accounts and procurement managers “remain relatively optimistic” that “regular travel patterns to Hong Kong will bounce back”.
“Our corporate accounts also understand that with the CPI increases there will be some minor increases in our corporate rates for 2020. Also, our hotels are not in the main affected areas of protest activity, hence it is business as usual.
“We will therefore moderately increase our rates for 2020 after reviewing the performance and expectation from our corporate accounts, as these are based on the volumes and travel pattens, together with market intelligence,” Cronin elaborated.
Cronin shared that Wharf Hotels have group bookings confirmed for 2020, although enquiries for 1Q2020 has softened.
“Some customers for 1Q2020 are taking a wait-and-see approach before they commit, although major events such as Rugby Sevens in April 2020 have announced they are proceeding,” she said.
Elsewhere in the city, sales managers from a homegrown hotel chain who declined to be named, cited that the first quarter is typically a low season for business travel, and therefore, rates will be slightly raised – albeit below 10 per cent – for 2Q2020 given the usual peak season.
Holiday Inn Golden Mile’s general manager Gerhard Aicher, who expects a challenging year ahead due to the ongoing situation, said rates for the year ahead will be impacted but gave no clear indication how.
Meanwhile, Destination China’s general manager, Gunther Homerlain commented: “What we are seeing for 2H2020, are that rates are unrealistically high, but short-term rates are based on a we-will-take-anything attitude. Hotels are desperate for business now, and are throwing out all sorts of crazy rates; this is very unrealistic, and driven more by owners and revenue manager than market information and experience.”
Homerlain noted that if troubles stop now, within six to eight months, business might return to normal, but this normal will be in mid-summer which is traditionally slow business season anyway. Hence, he opined that corporate market will not pick up until 3Q or 4Q2020.
A similar sense of cautious hope has also been adopted by CWT’s general manager South-east Asia and Hong Kong, Sim Kian Peng. He said: “For 2020, companies are in a wait-and-see mode, but given Hong Kong’s importance as a business destination, there is a high degree of hope that tensions will de-escalate.”
Regardless, Aicher said that the Hong Kong Tourism Board (HKTB) has their work cut out for them to bring cancelled events back to the city in 2020.
“(A lot of) support for the MICE sector, to compete with other destinations and reestablish confidence in the Hong Kong market, will also be crucial,” he opined.
David Wong is the co-founder and CEO of BOOQED, a digital platform for tenants and landlords to find or monetise short-term unused business spaces. He brings extensive international corporate and start-up experience, including two successful exits from previous ventures.
Two of South-east Asia’s strongest markets for corporate meetings and incentives are said to have potential for further growth, provided the region’s events service providers are able to identify trends and capitalise on them, according to two market opinion leaders who spoke at the fourth BE@Penang conference organised by the Penang Convention & Exhibition Bureau (PCEB).
Speaking during the session titled, Market Digest: Insight & Trends, last Thursday, Prashant Yadav, CEO of Liberty International India, shared that South-east Asia was a natural favourite among Indian event organisers because it is a medium-haul destination. However, to keep them coming, regional CVBs and inbound events agents must be more creative in marketing their destinations.
One of the misconceptions about Indian MICE groups that must go was the belief that Indians want only Indian cuisine while on their travels.
Prashant said: “There is a growing number of Indians who are willing to try local food when overseas.”
Further illustrating his point, he said 15 per cent of his corporate clients today avoided “Indian food of any kind” when overseas, and he predicted this number to grow to become 40 to 50 per cent within the next decade.
Prashant added that while Indian clients have done their events at major South-east Asian cities, most were willing to return to the destination if inbound specialists could offer memorable experiences that cannot be found themselves.
He also tipped the audience off to a growing desire among Indian corporates for “interactive and participatory” corporate social responsibility (CSR) programmes.
As for the UK market, Ross Barker, commercial director of the meetings portfolio for Northstar Travel Media UK, shared that event organisers in Asia to seriously look at digital protection and hire the services of pedigree technology providers with a reliable track record to support events. He explained that corporate groups from the UK pay particular attention to digital breaches and delegate data protection.
In addition, he emphasised a growing trend in the UK for personalisation of events for a multi-generational audience. Such events has to allow human connections and cultural enrichment for attendees in destinations they visit.
Sustainable meeting venues are also no longer trendy, but a necessity for UK event owners.
Against a backdrop of Brexit uncertainty, Barker said longhaul travel for UK meeting and incentive groups have remained buoyant. Referencing the Meetings & Incentive Travel 2016 & 2018 Trends & Spends report, he pointed out that the number of business events groups and participants to longhaul destinations from the UK had increased in 2018 against 2016. The report found 574 business events groups in 2018 with a total of 57,849 participants, compared with 247 groups with 22,239 participants in 2016.
Average group size in 2018 was 101 delegates compared with 90 in 2016 while the length of stay over both periods remained at three nights.
The Meetings Show 2019 survey further revealed that over 36 per cent of UK buyers identified South-east Asia, namely Indonesia, Malaysia, the Philippines, Singapore and Thailand as future destinations for their meetings, events and incentives. Meanwhile, 55 per cent of those surveyed said they were planning events in longhaul destinations over the next 12 months.