Competition heats up amidst limited supply and increasing demand.
With steady inbound arrivals from mainland China and Southeast Asia, Hong Kong’s hoteliers are suiting up for what looks like a busy year ahead. The city’s occupancy rates and tourism numbers are signalling the need to add more supply and reevaluate the property market. And developers are rising to the challenge with some promising projects and enhanced service offerings this year.
Hong Kong has been plagued with land shortage and skyrocketing property prices in the past years, but this has not barred investors from buying in. According to Frank Sorgiovanni, head of research Asia Pacific at JLL Hotels and Hospitality Group, Hong Kong’s property market remains competitive and boasts strong trading fundamentals.
This is why high net worth investors like the Chinese are very keen on positioning themselves here. In fact, Chinese firms looking into growing internationally as well as businesses aiming to expand into the mainland have both made Hong Kong their hub.
Bleisure – a growing trend of business travellers who extend their stays for touring purposes – has been gaining traction in Asian financial centres such as Hong Kong, Singapore, Seoul, and Taipei. Hotels are jumping in on the bandwagon to offer services to meet bleisure travellers’ evolving needs, which range from digital accessibility to short evening tours after a long day at a conference room.
When faced with a sluggish property market, Hong Kong looks to its business sector for relief. As a result of the territory’s key position in the region, the meetings, incentives,
conferences, and events (MICE) industry saw the growth of overnight visitors amidst an otherwise lacklustre year for Hong Kong real estate. The Hong Kong Tourism Board (HKTB)’s MICE division, which introduced its Hong Kong Top Agent Award in 2016, recognised top agents from mainland China, India, Indonesia, and South Korea for raking in the numbers.
HKTB recognised an overall 9.9% growth in MICE arrivals in the previous year. Kenneth Wong, general manager of the HKTB MICE and cruise division, adds that Hong Kong saw a staggering double-digit growth in some of its long-haul and short-haul markets. “We foresee the rebound may continue due to the growth in the number of Southeast Asian tourists and overnight visitors who came to Hong Kong to attend meetings, conventions, and exhibitions,” says John Girard, vice president of development, area general manager (Hong Kong) of Regal Hotels International. “We continue our strategic alliance with the Asia World-Expo and partners in promoting Hong Kong as a meeting destination, and attracting more visitors and business travellers from China, Korea, and across Asia. For example, in March and April, we have the Asia Jewellery Fair and Global Sources,” he adds.
Girard, also the general manager of Regal Airport Hotel, believes that Hong Kong’s varied tourism offerings will keep travellers coming. He says that travellers can expect the government and the HKTB to initiate more versatile tourism projects with a local touch and an infusion of environmental elements. Girard shares that Regal is the first airport hotel in Hong Kong to introduce a built-in high-definition 9-metre width, 4-metre height LED wall in the pillar-free grand ballroom, thus levelling up the visual experience for events or meetings. Regal also introduced the convenience of its Regal MICE app, which services meeting and conference events and is greatly valued by its clients.
Meanwhile, Renaissance Harbour View’s former lobby lounge has been transformed into a brand new Mirage Bar & Restaurant where clients can enjoy a stunning view of the harbour whilst having dinner or conveniently holding meetings. “Its full-length windows offer guests panoramic view to mirage an airy environment. The iconic 25ft high island bar is covered in lush greenery, creating an oasis away from the hustle and bustle of the city for guests to unwind day and night,” says Alice Tiu, director of marketing, Renaissance Harbour View Hotel.
Alongside developing innovations for the bleisure market, Hong Kong’s hotels continue to roll out creative offerings for the traditional tourism crowd. Girard shares that Regal
Airport Hotel has established a state-of-the-art gallery which showcases rare and regional works for varied audiences. Regal also introduced the world’s first smart storage facility
at the Regal Airport Hotel, which provides a convenient and secure service to store valuable items such as art pieces and expensive souvenirs.
A visit to Hong Kong is also not complete without a trip to Disneyland, and tourists who will be arriving in May 2017 will get to enjoy the new Disney Explorers Lodge, Hong Kong Disneyland’s third hotel. With reservations now open, tourists can book in advance and choose from 750 hotel rooms which have an open sea view or a landscape view of one
of the four lush themed gardens that exemplify the cultures of Asia, South America, Africa, and Oceania. “Hong Kong Disneyland is committed to investing in new offerings for our guests. Disney Explorers Lodge is not only a fantastic getaway for Disney guests, but it’s also a one-of-a-kind hotel experience for those visiting the cosmopolitan city of Hong Kong,” says Samuel Lau, executive vice president and managing director of Hong Kong Disneyland Resort.
The Disney Explorers Lodge brings Hong Kong Disneyland Resort’s hotel rooms to a grand total of 1,750. Since 2013, the resort has undergone massive expansions and implemented plenty of innovations. At present, the resort has seven themed lands and a whole suite of entertainment offerings. It is the first Disney park to feature a Marvel-themed attraction, the Iron Man Experience.
Renaissance Harbour View Hotel’s Tiu shares that one of the biggest changes in 2016 was the acquisition of Starwood by Marriott Hotel, making it the world’s largest hotel company. Tiu adds that, currently, they have a total of nine hotels under the family. And it’s not just Starwood on the acqusition trail, with mainland Chinese investors driving the purchases in Hong Kong, according to Savills. “In Hong Kong, activity continued to be boosted by mainland Chinese investors’ purchases, based on confidence fuelled by relatively limited new supply and high occupancy rates. Total transactions in Hong Kong reached US$287m.
Last quarter, the Butterfly on Morrison Boutique Hotel was sold for HK$880m (US$113.5m) to the Hong Kong-based Gale Well Group,” says Simon Smith, senior director of research Asia Pacific at Savills. Smith adds that despite the moderate decline in occupancy across Asia Pacific, most of the regional markets showed strong growth rate. He says that the average daily rate (ADR) will continue to drive performance in Asia Pacific’s hotel sector in 2017.
“As a mature market, Hong Kong’s inbound market is expecting a slow but steady increase in arrivals to Hong Kong. Overall, we think HK remains an attractive visiting destination, as this compact city is safe and it has a good legal environment for businesses. A number of new hotels will open in 2017, which will give tourists and business clients more options,” says Tiu.
Who made it to HKB’s list?
With the MICE boom in Hong Kong, L’hotel Nina et Convention Centre takes the top spot this year with 1,608 rooms. Regal Airport Hotel and Regal Riverside Hotel grab second and third spots with 1,171 and 1,138 rooms, respectively. Harbour Plaza Resort City places fourth with 1,102 rooms whilst at number five is Panda Hotel with a total of 911 rooms. Combined room count for the 50 hotels is 34,506.
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