SimmonsTHE good times are starting to roll again for Hong Kong hotels as the territory emerges from recession doldrums with a confidence booster from Mickey Mouse.
The former British colony's tourism industry was hit hard by Asian flu and post-handover blues. Hotel rates fell by about 50 per cent as general managers struggled to fill rooms and tourists just stopped coming.
But the latest official figures show recovery is under way. The Hong Kong Tourist Association (HKTA) has adjusted its 1999 forecast to 10.4 million visitor arrivals, as statistics for September showed a major rebound over last year.
The Hong Kong Hotels Association (HKHA) also has good news. Average occupancies are up about five per cent on last year, to around 78 per cent, and while rates are down they are not likely to slide further.
HKHA executive director James Lu says the recovery is "long overdue".
The news that Disneyland is coming to town is a further boost to the industry.
The HKTA estimates an additional 2,100 to 2,200 hotel rooms will be needed by the time Disney opens on Lantau Island in 2005.
There are presently 35,100 hotel rooms in Hong Kong. Stock will raise to 45,400 rooms by 2003 and Disneyland's own hotels will provide a further 1,400 rooms, bringing the total to 46,800 rooms in 2005. But the HKTA estimates there will be demand for 48,900 rooms, assuming an 85 per cent occupancy, by that time.
Lu agrees: "Hotels are built to be filled. No developer would build a hotel and not fill it. I'm sure new hotels built for Disney will find the demand to fill their rooms."
Lu does, however, call for caution on room rates. "I think the thrust we are seeing now is sutainable if we do the right thing and remain pragmatic. If we do the wrong thing we will lose it again." He urges hoteliers to work more aggressively with travel agents to develop packages and incentives.
Century International Hotels group director of sales and marketing Mark Simmons is also bullish about Hong Kong's recovery. "There is definitely renewed interest in Hong Kong as a leisure destination from Europe. Both the Century Hong Kong Hotel and the Century Harbour Hotel had good performances in the last quarter of 1999 and have ambitious plans and forecasts for 2000 in terms of growth," he says.
Century will open its third Hong Kong hotel in the second quarter of 2000. The 220-room Century Inn, North Point, will cater to budget business and leisure travellers. The opening will bring Century's inventory to more than 1,000 rooms in Hong Kong, making it a major player in the market.
Simmons is confident that Disney will generate more new interest in the destination and open up new regional and international markets.
Marco Polo Hotels, with three properties in Hong Kong, also welcomed the news from Disney. "Our group is likely to benefit from Disney with its potential to lure tourists, more hotel rooms will be needed in Hong Kong to accommodate the additional tourists by the time Disneyland opens in 2005," says senior vice-president marketing and development Jeffrey Flowers.