Hong Kong hotels target staycations as city’s tourism industry suffers worst crisis since Sars


Hong Kong hoteliers are looking for new ways to ride out seven months of downturn, including tapping into the staycation market with hard-to-resist discount packages.

Far East Consortium International, which operates nine hotels comprising 2,867 hotel rooms in Hong Kong, is among those seeking staycationers.

“We felt the impact after October when tourist arrivals to the mainland dropped a lot,” said Winnie Chiu, executive director of the Far East, adding that mainland tourists made up about 50% of her guests. .

In a bid to boost occupancy rates, Chiu said many operators are targeting families to spend their weekends in hotels in Hong Kong instead of traveling overseas. For example, his Dorsett Tsuen Wan has a 2,000-square-foot kids’ zone and four themed children’s rooms, aimed at kids ages two to eight.

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“The facilities have attracted many families to stay at our hotels, especially over the Christmas holidays,” said Fion Wong, marketing communications manager at Dorsett Tsuen Wan, which helped push occupancy up to at 80%.

According to Wing On Travel and Agoda, room rates at Dorsett Tsuen Wan on January 8 are 90% lower at HK$189 than the normal price of HK$2,036.

An aerial view of buses stuck between anti-government protesters in Tsim Sha Tsui, October 20, 2019. Photo: May Tse

Hong Kong’s hospitality industry has been hit hard by a sharp drop in tourist arrivals due to seven months of mostly violent protests.

In November, the city’s tourism industry suffered its worst downturn since the Sars (severe acute respiratory syndrome) outbreak in 2003, with arrivals plummeting 56% year-on-year. The numbers were no better over the Christmas period. The number of mainland package tours fell 90% to around 20 from 200 in 2018, according to Hong Kong’s Travel Industry Council.

In the third quarter of 2019, the average occupancy rate for hotel rooms fell to 72% from 91% a year earlier, according to the Bureau of Commerce and Economic Development. Average hotel room rates also fell 16.2% from a year earlier.

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Some five-star hotels like The Peninsula Hong Kong in Tsim Sha Tsui have been hit harder. The hotel’s occupancy rate fell to 35% for the three months to September, from 61% in the second quarter, according to a filing on the Hong Kong stock exchange by Hong Kong and Shanghai Hotels, the owner of The Peninsula.

Sun Hung Kai Properties, the city’s largest developer by market value and operator of some well-known hotel brands, said it is placing more emphasis on local demand. Its hotel portfolio includes Four Seasons at IFC in Central, Ritz Carlton and W at ICC in Kowloon and the brand new Alva Hotel by Royal in Sha Tin.

“We did staycation business,” said Adam Kwok, executive director of SHKP.

He said various SHKP hotels are offering discount packages and fun activities aimed at couples and families in hopes of keeping them in the city here over the weekends to offset low tourist demand.

For example, Four Seasons offers classes in wine tasting, drawing and photography, Kwok said.

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A one-night family package at Alva Hotel by Royal for two adults and two children with buffet breakfast and dinner costs HK$1,888.

Excluding the buffet, “the room costs about 400 HK$; [its] almost like giving [the room] for free,” Kwok said.

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Tourism lawmaker Yiu Si-wing noted that hotels in Ocean Park and Disneyland have successfully adopted similar strategies to attract more locals in the summer.

Yiu, however, doubted the effectiveness of staycations in supporting the hotel industry on weekdays.

“The effect is better in summer [and not on] regular weekdays,” Yiu added. “For resort or luxury hotels…if the hotel is very cheap, some people might be interested. Some people can stay one night [just] for business and relaxation. But the market mainly relies on tourists.

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