Hong Kong airport hotel operator Regal staring at abyss as it takes a blow from coronavirus and protests
By Pearl Liu pearl.liu@scmp.com
/ https://www.scmp.com/business/companies/article/3077196/hong-kong-airport-hotel-operator-regal-staring-abyss-it-takes?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3077196 |
Regal Hotels International Holdings, which owns the airport hotel in Hong Kong, said that the double whammy of coronavirus outbreak and social unrest could prove disastrous for the company, as one in five rooms at its properties remains unoccupied.
"Unless the further spread of the coronavirus can be promptly contained, business outlook for this year would not be optimistic," the company said in its annual result filing to the Hong Kong stock exchange late on Thursday.
Regal, chaired by property magnate Lo Yuk-sui, has nearly 5,000 rooms across nine hotels in the city through its 74.6 per cent owned subsidiary Regal Reit.
Hong Kong's hotel and tourism industry has suffered from the months-long social unrest that started last June, as it drastically reduced the number of visitors to the city as the protests escalated. Now, a complete travel ban on tourists entering the city to prevent the spread of the coronavirus that has killed more than 23,300 people worldwide and infected over 510,000 people will further weigh on the sector.
A traveller wades through anti-government protesters at Hong Kong International Airport's arrivals hall on August 13, 2019. Photo: Sam Tsang alt=A traveller wades through anti-government protesters at Hong Kong International Airport's arrivals hall on August 13, 2019. Photo: Sam Tsang
Other countries including China are taking similar steps to keep out the virus.
"With the recent outbreak of the coronavirus pandemic in over 100 [160] countries worldwide, the social and business activities around the world as well as cross-border traffic have been drastically affected," Lo said in the statement.
The company's business "met intense pressure" last year, resulting in profit falling 17 per cent to HK$454.6 million (US$58.6 million) on revenues of HK$2.2 billion, which declined 14.8 per cent.
Apart the company's hotel at the airport, the rest of its properties took a drastic hit last year due to the protests. The vacancy rate at its upscale Regal Hotels, including one in the protest hotspot of Causeway Bay and in the shopping district of Tsim Sha Tsui, rose to over 20 per cent on average last year, even after room rates were cut by 10 per cent.
The vacancy rate at its four service hotels stood at 25 per cent even after prices were reduced by 17 per cent.
The situation at Regal's European business is no better as the coronavirus continues to spread rapidly across the continent. The company owns a 186-room hotel in Barcelona, Spain, and a 73-room boutique property currently under renovation in London, UK.
The company will pay a final dividend of 6 HK cents, bringing the total dividend for 2019 to 10.5 HK cents, down from 19 HK cents in 2018.
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This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
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