What’s next for Hong Kong hotels?
CBRE released a new report around the future of Hong Kong’s hotel industry. Key highlights include:
• Demand for hotels in Hong Kong has collapsed amid a standstill in regional travel owing to tight visa restrictions, significantly reduced air traffic and risk aversion by travelers – adding to pressure on a market already impacted by local sociopolitical unrest over the course of 2019.
• While June saw some signs of optimism following the re-opening of theme parks and discussions about creating travel bubbles with other regional markets to facilitate business and leisure travel, a resurgence in new cases in early July has dented expectations of a quick rebound?.
• The road to recovery is therefore likely to be a long one. However, Hong Kong’s relative success in containing the virus so far, combined with its long-established reputation as one of Asia’s top travel destinations, can provide a solid foundation for its revival.
Meetings-driven tourism may never fully recover
Meetings, incentives, conferencing and exhibitions tourism was one of the first types of tourism to be impacted by the global spread of COVID-19 and it could be one of the last to fully return, as international business arrivals are projected to fall by 35.3% in 2020, according to data and analytics company GlobalData. According to research from the company, travel is a costly expense for all companies, and with the rise of video conferencing software such as Zoom and Google Meet, many will realize that this type of ongoing expense is unnecessary.
U.S. performance up slightly
U.S. hotel performance data for the week ended July 18 showed slightly higher occupancy and room rates from the previous week, according to data from STR.
July 12-18 (percentage change from comparable week in 2019):
• Occupancy: 47.5% (-38.9%)
• ADR: US$98.56 (-28.0%)
• RevPAR: US$46.87 (-56.0%)
U.S. occupancy has risen week over week for 13 of the past 14 weeks, although growth in demand (room nights sold) has slowed recently. Aggregate data for the top 25 markets showed lower occupancy (40.3%) and ADR (US$97.16) than all other markets. Norfolk/Virginia Beach, Virginia, was the only one of those major markets to reach a 60% occupancy level (64.5%). Two additional markets surpassed 50% occupancy: Detroit, Michigan (53.1%), and Atlanta, Georgia (50.6%). Markets with the lowest occupancy levels for the week included Oahu Island, Hawaii (22.0%); Miami/Hialeah, Florida (30.1%); and Orlando, Florida (30.1%). Of note, in New York, New York, occupancy was 35.9%, down from 37.0% the week prior. In Seattle, Washington, occupancy was 34.2%, up from 32.4% the previous week.
Wyndham offers two nights, one free
Wyndham Hotels & Resorts has launched a new promotion, offering Wyndham Rewards members a free night – in the form of 7,500 bonus Wyndham Rewards points – when they stay two consecutive nights or more, now through September 10. The promotion is driven in part by the fallout of the COVID-19 pandemic, according to Wyndham.