Hotels feel pinch in push for rates relief

Local | Sophie Hui 20 Feb 2020

Sophie Hui

The hotel industry has asked the government to waive rates and rents for a year with the industry facing a crisis of closures as some occupancy rates fell to single digit levels.

The Federation of Hong Kong Hotel Owners said the industry's outlook remains uncertain amid the outbreak. Many employees have taken unpaid leave while some hotels have begun laying off staff. Several small-and-medium-sized hotels and guesthouses are facing closures.

Financial Secretary Paul Chan Mo-po has been urged to waive rates and government rent for a year in the upcoming budget onWednesday. The industry also asked for a tax concession and a one-off subsidy.

The demands came after the Tourism Board said only 3,000 tourists a day visited Hong Kong in the first two weeks of this month, plunging by a significant 98 percent year on year. The room occupancy rate for hotels this month has dropped to 20 percent while the occupancy rate in some high-end hotels fell to a single digit.

The cruise business is also expected to slump this a year after the Diamond Princess and World Dream fiasco prompted short-term fears among Hongkongers, said Yiu Pak-leung, deputy chairman of China Travel Service (Hong Kong).

Yiu, who is also the convener of an alliance of travel agencies, called the blow to the tourism industry "unprecedented."

He said yesterday that many large property owners had only reduced rents by 10 to 20 percent, which was insufficient, adding he hoped MTR Corp would waive rents for February and March, and cut April and May rents by half.

He also hoped the government would give a HK$80,000 grant to travel agencies as several smaller tour agencies were laying off staff or closing down.

The Performing Industry Association asked the government to waive venue charges for shows being canceled or suspended due to the outbreak, as well as exempt service charges for tickets sold via the Urbtix booking system.

It said that more than 200 concert sessions have been canceled or postponed, with many international performers deciding to put performances on hold.

The association added that more than 100 concerts could be canceled and over 10,000 jobs lost if the situation continues over the coming months.

Meanwhile, the Business and Professionals Alliance for Hong Kong has suggested the government provide full guarantees for small-and-medium enterprises when they borrow money from banks, so they could pay their expenses at lower interest levels or free of interest altogether.

It also supported calls for a HK$10,000 cash handout to be given to each permanent resident as instant relief money.

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