It could be difficult to find a room in Hong Kong; HK has the fullest hotels in the Asia-Pacific region with an average occupancy rate of 84 per cent for the first nine months of the year, according to a new survey by PriceWaterhouseCoopers.The company estimates occupancy rates for the entire year will be 82.7 per cent, a 3.3 per cent year-on-year rise. The average daily room rate is expected to rise 7.6 per cent to HK$703. Hotels are expected to enjoy 11.2 per cent year-on-year growth in revenue per available room, known in the trade as Revpar. Revpar, which combines occupancy and room rates to measure the performance of the hotel industry, is expected to be HK$581 for 2000. Despite recent high growth seen in the sector, local occupancy rates are expected to fall slightly below 80 per cent over the next three years or so, PriceWaterhouseCoopers said. It expected occupancy rates for SAR hotels would drop 4.9 per cent to 78.6 per cent while Revpar would fall a slight 0.2 per cent to HK$580 next year.
Christopher Khoo, hospitality and leisure research director for PriceWaterhouseCoopers in Asia Pacific, said rates would soften next year when 5000 new three and four star hotel rooms came into the market. That figure did not even include the new hotels associated with the Disney project, Mr Khoo added. “However, rates will increase in the future,” he said. Furthermore, PriceWaterhouseCoopers expected that average daily room rates would grow 6.3 per cent to HK$784 in 2002 and 7 per cent to HK$839 in 2003. It forecast Revpar will grow 6.9 per cent to HK$620 in 2002 and 7.6 per cent to HK$667 the following year. UBS Warburg analyst Eric Wong said that PricewaterhouseCoopers` forecast to have single digit growth was slightly conservative. “It seems to be a rather bearish forecast to have single digit growth in Revpar over the next few years,” Mr Wong said. He said that double-digit growth in Revpar would be a more reasonable prediction. “The economic recovery momentum is still there and is unlikely to weaken. You also have to consider the improving purchasing power of people in the region,” Mr Wong said.
PriceWaterhouseCoopers uses an econometric forecasting model, which tracks the statistics and historic data of the industry. It also takes into account other factors such as tourism demand. “The steady recovery of rates for the whole industry is indeed good news after hotel rates fell dramatically in 1998 following the Asian crisis and the post hand-over blues,” said Michael Chin, the company`s Asia Pacific hospitality and leisure senior director. But Mr Chin noted that the forecast average daily rate of HK$839 in 2003 was still more than 30 per cent lower than the 1997 pre-crisis high of HK$1,233. At that time Hong Kong was caught up in “hand-over fever” and hotel rooms were extremely scarce commodities.
PriceWaterhouseCoopers also found continuing momentum in rates growth distributed throughout the Asian region. Tokyo and Seoul recorded the most expensive hotel rooms to September in the nine months to September, with average daily room rates of US$167.39 and US$151.2 respectively. Hong Kong ranked fifth highest after Taipei and Sydney.