Hotel operators want the government to establish a mechanism allowing them to bail out of a quarantine scheme after seeing empty rooms following the latest travel restrictions.

The 36 designated quarantine hotels are averaging an occupancy rate of only 40 percent, which is lower than expected, tourism-sector lawmaker Yiu Si-wing said yesterday.

Yiu said hotels charging no more than HK$7,000 for the two-week quarantine have seen a higher occupancy rate of 80 to 90 percent. But hotels charging more than HK$10,000 for 14 days are less than 40 percent occupied.

"The cheaper hotel rooms are mostly booked for foreign domestic helpers by employers. Of course, they regard price as a major consideration," Yiu said,

"The most expensive hotels have seen fewer customers and their occupancy rates are only around 20 to 30 percent. The major problem is that the number of travelers arriving in Hong Kong is fewer than expected," he added.

Yiu also forecast that the occupancy rate of designated hotels could further drop to around 30 percent, adding that he expected the government will need to offer more subsidies for them.

He also said that the government estimated that around 1,000 travelers would come to Hong Kong every day and had reserved 12,000 hotel rooms for them. However, only a few hundred people are arriving per day currently.

Yiu added that the number of arrivals would continue to drop, as Hong Kong has banned all arrivals from the United Kingdom to prevent a highly contagious new coronavirus variant from entering the city.

"A lot of Hongkongers were expected to return to the city to celebrate the Lunar New Year, but now it's unclear if they will come," he said.

Hotels are now considering discussing with authorities a mechanism that would allow them to join or withdraw from the scheme flexibly and begin receiving local customers later.

The designated hotel scheme, which came into effect on Tuesday, required all designated hotels only receive overseas arrivals for quarantine.

All 36 participating hotels have signed a two-month contract with the government, and the contract can be terminated with a month's notice after the two months.

Yiu said no hotel has withdrawn so far, as the scheme only began two days ago.

Authorities announced earlier that they would guarantee a 50 percent occupancy for the designated quarantine hotels and will provide a subsidy - up to HK$600 for each room - if occupancy rates fall short.

Yiu said more hotels are going to ask for more subsidies than expected from the government, as they could be facing lower occupancy rates next month.

Yiu Si-wing

Hotels want way out of virus scheme as occupancy drops