New transport links get mixed reviews from Hong Kong’s hospitality sector, writes Michael Taylor.
Two major infrastructural projects linking Hong Kong with mainland China have opened to mixed reviews.
The Guangzhou – Shenzhen – Hong Kong Express Rail Link opened to the public on 23 September 2018. The Hong Kong – Zhuhai – Macao Bridge followed a month later on 24 October.
Supporters of the two projects boast that they will strengthen ties between cities in the Pearl River Delta, cutting travel time and encouraging economic growth. Detractors, however, claim that the projects were politically driven white elephants that were a waste of taxpayers’ money, offering few tangible benefits to Hong Kong.
So what will be the impact of the two transport links on the semi-autonomous territory’s tourism and hospitality sectors?
“In terms of the hotel industry, we are anticipating an increase in the number of domestic travellers from China to Hong Kong as the opening of the Hong Kong-Zhuhai-Macao Bridge (HZMB) and Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (Express Rail Link) have made Hong Kong more accessible to Mainland Chinese visitors,” says a spokesman for The Peninsula Hong Kong, which was recently named Hong Kong’s best city hotel by Travel + Leisure magazine. “As for the impact on the hotel itself, it would be rather too soon for any comment at this stage.”
According to Benedict Chow, general manager, Harbour Grand Hong Kong, a member of the Preferred Hotels & Resorts group, the hotel has already noticed some guests arriving by way of the high-speed rail link, especially from cities in nearby Guangdong province.
“It will certainly bring more business travellers, MICE groups and leisure travellers to Hong Kong, especially from those cities with limited flights to Hong Kong,” Chow says.
As for the new bridge, Chow expects retail businesses to benefit right away, but he is not so sure what the impact will be for the hospitality sector. “For hotels, it is too early to tell the impact. The Hong Kong Tourism Board (HKTB) is currently promoting Hong Kong to these areas. Since these areas are very close by, the booking lead time would become very last minute and mostly involve leisure travellers.”
It will, of course, take time for the full effects of the two projects to become known.
“We are only slowly starting to see the benefit of the bridge as well as high speed trains connecting Mainland China to Hong Kong,” says Four Seasons Hotel Hong Kong general manager and regional vice president Christoph Schmidinger.
“Visitors to our city will substantially increase over the coming decades as they will enjoy the new multitude of means of access to Hong Kong.”
Lion’s share China already represents the lion’s share of visitors to Hong Kong, accounting for 78.5 per cent of arrivals, or 41.28 million visitors, from January to October 2018. Many of the mainland visitors to Hong Kong, however, are day trippers who don’t spend the night. As for travellers spending at least one night in Hong Kong, China accounted for 68.6 per cent, or 16.32 million arrivals.
“There has been a year-on-year growth of 7.1 per cent vs 2017 on overnight visitors,” Chow says. “The China market is important because it is the biggest source of visitor arrivals in Hong Kong. Their stays are throughout the year with different purposes, including business, MICE and leisure travel.”
According to an interim report published by The Hongkong and Shanghai Hotels, Ltd, the number of overnight tourists visiting Hong Kong increased by six per cent in the first half of 2018 and the outlook for the tourism sector looked “robust for the second half, which is Hong Kong’s traditional peak season.”
“The Peninsula Hong Kong reported a significant increase in average rate and RevPAR for the first six months, driven by strong suite sales, guest direct business and changes to our rate strategy,” the report says, adding that business from long-haul markets recorded solid year-on-year gains. Food and beverage outlets also “performed strongly, with most restaurants enjoying increased patronage and higher average spend.”
With 6,860 new hotel rooms expected to come on line by 2020, the industry faces considerable challenges. While the number of overnight visitors has been increasing, trade fair attendees have been staying in Hong Kong for shorter periods of time than in previous years, Chow says. The growing popularity of cruises, shorter booking lead times, more “transparent” room rates, and the “many ways for travellers to shop for the best price until last minute” are other challenges.
“Hong Kong has to be more creative to develop as a world class destination and attract more MICE business,” Chow says.