Hotel revenues could halve, warns S&P, as conference participants, tourists give protest-hit Hong Kong a miss

By Cheryl Arcibalcheryl.arcibal@scmp.com / https://www.scmp.com/business/companies/article/3032725/hotel-revenues-could-halve-warns-sp-conference-participants?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | October 15, 2019 10:15 AM SGT
Hotel owners are facing the grim prospect of their revenues being halved as conferences and exhibitions have either been cancelled or postponed and tourists are choosing to staying away from Hong Kong amid escalating social unrest.
The hotel segment will bear the brunt of the impact, says S&P Global Ratings.
"Hotel owners are facing a 50 per cent drop in revenues, given August's occupancy rate fell to 66 per cent and could further drop," the ratings agency said in a recently released report.
In some cases, occupancy of hotels in protest-hit areas has fallen to 20 per cent, according to hoteliers and industry observers, forcing operators to slash rates to lure guests.
"We have heard testimonies that certain hotels saw their number of check-ins fall to five to six rooms per day in the days where protests hit the hardest," said Simon Haven, senior analyst at Euromonitor International.
Tourists arrivals fell nearly 40 per cent in August from a year earlier. Photo: Felix Wong alt=Tourists arrivals fell nearly 40 per cent in August from a year earlier. Photo: Felix Wong
The Dash Hotel on Minden, for example, a boutique hotel in Tsim Sha Tsui, had to reduce its rates by as much as 30 per cent to maintain its occupancy rate, illustrating how four months of increasingly violent protests have dimmed the prospects of the city's pillar industries such as retail, tourism, and hotels.
Many shopping malls, supermarkets and convenience stores are shuttered at weekends, when the protests regularly descend into violent clashes with police and vandalism.
Tourists arrivals fell nearly 40 per cent in August from a year earlier to about 3.6 million visitors, the lowest since the 2003 SARS disease outbreak.
"We have been monitoring Hong Kong's [hotel] performance for a while, and it's bad, just bad ... Our data shows that the negative impact kicked off in July,...