HK's hopes for strong Oct/Nov vanish

After what has already been a difficult year, Hong Kong hotels were hoping that the October/November peak period could provide relief. At this time, US visitors, who are also some of Hong Kong’s highest per capita spenders, typically descend on Hong Kong en masse, many of them for trade fairs and exhibitions. With last week’s tragedy, this glimmer of hope for a beleaguered industry has been extinguished. The main question now is how big the fallout will be and how much can be done to lessen its impact. What to do with rates is one issue that needs to be addressed, with many agents, such as Japan Travel Bureau, calling for cuts. Yo Nishiguchi, managing director and general manager in Hong Kong, says that some hotels, especially properties on the island side, and those that have suffered most from US cancellations, are already pressing ahead. Some are offering 20-30 percent cuts compared with normal rates at that time of year, he said. “We are now strongly persuading hotels to respond.” In an environment in which fear, more than cost-cutting, is prompting would-be travellers to stay at home, rate cuts may be besides the point, argues Nigel Roberts, general manager of the Great Eagle Hotel. “If people aren’t travelling, rate cutting would be superfluous,” he said, noting that his hotel has tried to stay out of the “rate-chopping game” started in May, before the tragedy. Julia Record, spokeswoman for the Shangri-La group, says “It’s too early to say regarding what we will do with rates and the effect on occupancy,” although there are certainly no immediate plans to cut rates. “It depends on what is going to happen, what the US will do to retaliate. We’re still monitoring the situation.” Although he declined to predict by how much Great Eagle occupancy could be affected, it will feel the pinch, said Roberts. He noted that “our market is very slanted towards New York and the garment industry.” However, it has been steadily building a strong base of Japanese clients, a market which has remained fairly buoyant this year. This could help contain the damage although it is over-optimistic to hope that Asian travellers who had planned to travel to the US will now come to Hong Kong instead, he said. Shangri-La hopes that the fact it has no properties in the US may lessen potential damage to the group compared to other hotel chains, according to Record. “We may be less exposed than some of the other hotels. We’ll be looking a lot more at the Asian market and travelling in Asia.” In the aftermath of the attacks, Shangri-La set up call centres in all its hotels and also waived hotel charges for customers for any nights on which they were unable to travel home. This goes one step beyond what the Hong Kong Hotel Association called for in a statement saying hotels had agreed to allow stranded visitors to stay on at the same rates they had paid on previous nights. In an already depressed economy, now enduring a crisis of mammoth scale , it does not look like good news. “We’ve managed to sustain through a lot of things this year,” Roberts said. “We’re all in the same boat now.”

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