Ivan LeeHong Kong hotels have dropped their rates and minimum package price standards have been suspended in a bid to overcome this year's tourism slump.
Hong Kong Hotels Association chairman Ivan Lee said three- and four-star hotels were likely to promote "value" packages with airlines to boost occupancy rates.
Hong Kong hotels have been approached by airlines planning discounted packages after the recent Cathay Pacific Super Offer. Lee said that while Singapore Airlines has met with "some local hotels", EVA Airways and China Airlines are still in their planning stages. Hotels have been negotiating lower rates in light of a fall in September and October occupancy rates to 70 and 76 per cent, respectively, compared with last year's 88 and 93 per cent.
A recent tourism study by a Chinese University of Hong Kong professor said Hong Kong room rates have become among the most expensive in the world. It also urged the government to centralise all tourism-related policies to reverse the current slump. Lee said the Cathay Pacific promotion showed the world that "Hong Kong is still attractive, and that closer cooperation in the industry is necessary." He said Hong Kong is likely to send its strongest-ever delegation to ITB in Berlin, BIT in Milan and other major trade events to sell more attractive deals than last year. "Unlike in 1997, where the low season periods were very brief, we have longer low season periods in 1998 where we can sell cheaper packages," Lee said.
The Travel Industry Council (TIC) recently suspended indefinitely its package cost price (PCP) policy as a result of severe airfare cuts over the past few months.
"Due to the dumping of fares and requests from member agents, the PCP policy can no longer be substantiated. So we have decided to let agents set their own prices," TIC executive director Joseph Tung said.
Tung said agents will still have to first pre-register their brochures and advertisements with the council before these get published.
The PCP was originally set up by the TIC to prevent price-cutting between agents at a time when airfares and related costs were still very strong and steady.