Sun Hung Kai's hotel, shopping mall businesses take a drubbing as tourist numbers plunge amid Hong Kong protests

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/business/companies/article/3026977/sun-hung-kais-hotel-shopping-mall-businesses-take-drubbing?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 18, 2019 2:47 AM SGT
Sun Hung Kai Properties, the largest developer by value in the world's least affordable housing market, said its hotel and shopping centre businesses have been hit hard by the protests that are shaking Hong Kong to its core and deterring visitors.
Occupancy rates at the company's hotels have plunged on average by 30 to 40 per cent, with some hotels finding themselves just half full, said Raymond Kwok, chairman and managing director of the company.
"Fewer customers came when a lot of Western countries issued travel warnings so the hotel industry has been affected quite a lot," said Kwok.
He was commenting on Thursday evening after revealing that the company's underlying profit jumped 6.6 per cent to HK$32.39 billion (US$4.14 billion) in the year to June 30. The protests that marked the start of Hong Kong's unprecedented political crisis started on June 9, so would have had a negligible impact on the figure.
Hong Kong's tourism industry has suffered its worst downturn in more than a decade, with arrivals plunging almost 40 per cent in August from a year earlier.
Market sentiment has been battered by massive street rallies that are now stretching into their 14th week.
The demonstrations, initially against a now-abandoned extradition bill but now calling for broader democratic reform, have come on top of the protracted US-China trade war which had already drained appetite for property in Hong Kong.
Kwok, whose company is also the largest private shopping-centre owner in Hong Kong, said malls such as New Town Plaza had been affected. Those catering primarily to tourists or mainland visitors have been the hardest hit.
"Now is still late September. I hope tourist [numbers] will recover and they will come more," said Kwok. "In the first half of the year, sales at the shopping centres increased. Of course, it reduced in July and August.
"For New Town Plaza, it is most important to protect customers and the staff [during the protests]. It has been necessary to spend more on security expenses.
"On certain days, of...