DestinationsWider border reopening in Asia-Pacific is the only way back to profitability for the hospitality sector, says Wharf Hotels' President, Dr Jennifer Cronin.

Hong Kong hotels need China—and APAC—to survive

JenniferCronin_Wharf Hotels1811
With long-haul travel out of the picture for the time being, the recovery focus is very much on Asia-Pacific for the near future, according to Cronin.

The immediate future of Hong Kong’s hospitality sector will depend largely in the hands of its neighbours, according to Wharf Hotels' President, Dr Jennifer Cronin.

Speaking at a recent media luncheon hosted by Wharf Hotels’ The Murray, Cronin -- who also holds a doctorate in crisis management -- theorised on the direction Hong Kong hoteliers would need to move towards in order to recover from the Covid-19 pandemic.

The industry, clearly, has to recognise the wholesale shift in travel processes that’s on the horizon. “Just as 9/11 changed our travel plans when it came to security, we’re all going to learn new ways of travelling while dealing with [the pandemic] until a vaccine comes out,” said Cronin.

“We need to develop new ways to entertain people, and to bring the community into the hotel, [such as] an afternoon tea with pets in the garden. That’s not something we would have been doing 12 months ago.”

Cronin, in her role as chair of Heritage Tourism Brands (HTB) — an initiative conceived by a collection of Hong Kong luxury hotels to rehabilitate the city’s image overseas and revive tourism in the wake of broad pro-democracy protests last year — and her alliance partners have since pivoted the group to the local market to halt the industry’s “haemorrhaging” in the wake of Covid.

Since its May launch, HTB's experiences for locals, as well as support from the Hong Kong Tourism Board’s Holiday at Home programme have propped up the hospitality sector.

However, figures are still a far cry from pre-Covid levels. For September 2020, luxury hotel occupancy rates sat at 27% (as opposed to 52% overall) and visitor arrivals came in at just over 61,000 in October according to Hong Kong’s Census and Statistics Department. Hotel occupancy averaged 91% in 2018.

The next few months, said Cronin, are expected to be some of the most difficult for the industry, even if the Hong Kong-Singapore air travel bubble will soon be launched.

“We’re all very excited by [travel bubble]; every ticket is sold out between now and Christmas. It’s not going to give us an injection but it is a positive move,” she cautioned. “If we prove it can work it will open up other opportunities. It’s great start, but it’s not going to be the vaccine we need.”

As the Singapore-Hong Kong bubble lifts off, the HTB has no confirmed partnerships with travel or MICE groups as an alliance, but it will explore collaborations with other government entities and identifying partnerships with credit card companies as a start.

Wharf Hotels' itself has already dabbled in virtual trade shows, and like the rest of the alliance stands ready to welcome global events, groups and FIT business once travel resumes.

Looking further ahead, Cronin believes the road to recovery for HTB, as well as Wharf Hotels, is through Asia-Pacific.

“We’ve taken all our strategies away from long-haul travel. It’s very much about short-haul, and like post-9/11, focusing on our own back yard — our Asian neighbours,” said Cronin. “They will be the ones to support us, and we’ll support them as well.”

Like-minded Covid responses also make APAC the logical travel target for the months to come, with China taking precedence.

"Opening to mainland China is going to be the real lifeline that will bring us back to profitability,” finished Cronin, noting Wharf Hotels' China properties are already back to pre-Covid levels and ahead of their 2020 budgets.

“We know there’s huge pent-up demand there. The pressure we continue to put on the government to reopen the borders is the only way we’re going to return to profitability.”

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