SINGAPORE, 16 September 2019: STR’s preliminary August data for hotels in Hong Kong indicates all-time low occupancy levels as ongoing protests continue to cripple the territory’s tourism economy.
Based on daily data for August, Hong Kong reported a massive decline in demand at 28.8% with average occupancy for the month dropping 29.8% to an incredibly low 63.9%. The last time occupancy fell to these levels was during the November 2002 to July 2003 SARS crisis.
The absolute occupancy level was the lowest for any month in STR’s Hong Kong historical database.
Adding more pain for hotels competition increased as hotel supply rose August by 1.5%.
Average daily rate (ADR) slumped 21.0% to HKD1,086.16
Revenue per available room (RevPAR) also dropped 44.6% to HKD694.15.
According to Financial Secretary Paul Chan, tourist arrivals to the city fell nearly 40% in August after a roughly 5% decrease in July.
After a prolonged period of overall performance growth, July was the first month that reflected how the protest had impacted on performance. All key benchmarks showing declines; occupancy (-4.2%), ADR (-7.9%) and RevPAR (-11.8%).
In mid-August, STR forecasted a 19.3% RevPAR decrease for Hong Kong for Q3 2019.
According to STR analysts, the market experienced 19 consecutive months of RevPAR declines following protests in 2014, and there has not been sufficient time between protest periods for the market to reach pre-2014 levels.
Prolonged protests could worsen Q3 performance significantly through final August numbers and softer-than-anticipated September results.