HK hoteliers and agents say room rates on par with last year, no need for alarm

2 September 2003

HONG KONG - Hong Kong Government Secretary Economic Development and Labour Stephen Ip has warned Hong Kong hotel owners this week against raising hotel rates too high during the October national day holiday, when mainland China travellers traditionally flood into Hong Kong.

But most hoteliers and agents say room rates are pretty much back to where they were this time last year.

Ip likened the rate hikes to "killing the goose that laid the golden eggs," and called for the industry to look forward and work together, rather simply jack up prices. He said the post-handover period in 1997 saw a dramatic drop off in tourists due to an increase in hotel rates.

"I believe nobody wants to see hotel room rates raised like seafood prices. The hotels were doing pretty well in the past and I am confident that everything can be resolved," he said.

In response to this, Travel Industry Council (TIC) Executive Director Joseph Tung says today's rates are not that far off from the rates this time last year.

"People are comparing rates right after SARS with rates now. It's not fair. Hoteliers offered a big bargain, so now we are going back to normal. We should be comparing the rates this October with last year's October national day. You will then see there is not a big increase. If you compare rates with the SARS period, of course it's a big jump, but you should compare apples with apples."

Ted Theobald, general manager for the Park Lane Hotel and PATA chapter chairman says, "I'm sure that the majority of hotel operators, like us will only be charging reasonable rates during the coming Golden Week in our case only 5 percent above the same period last year.

Richard Willis, managing director for P&O Travel Ltd. says while raising rates is acceptable, it shouldn't be an overkill.

"Market forces will adjust things. There is nothing wrong with that. Just don't overdo it. I think hotels should heed the warning and not to be too greedy. A good example is what happened in 1997. Now we have just recovered from a major disaster. Things could be challenging, and we don't want to leave a bad impression on a new market like China. We have to be pragmatic in pricing and honor contracts, but there is nothing wrong in adjusting rates."

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