Posted by
OffThePeak
11 yrs ago
Greedy Hotels - Good for Serviced Flats?
3X normal rates - seems like price gouging.
How will "the free market" cope ?
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Hong Kong is losing its appeal as a convention destination as crowded hotels triple room rates during big events.
During a jewellery convention last month, rates were so expensive that one company said it arranged for employees to stay with friends.
"The rates are crazy," said Rungrawi Prompa Hanapakdee, company secretary at Pak Import Export Co, a jewellery maker from Thailand, which had six workers stay at friends' homes during the Hong Kong International Jewellery Manufacturers show. "It cannot be increased like this every time we come here."
A shortage of hotels helped push up room rates nearly 12 percent in the first nine months of this year and some industry players expect Hong Kong will overtake Singapore as the world's busiest hotel market in 2013.
The average room rate was $190 for the first half of 2012, not far from Singapore's $210 and nearly double Shanghai's $100, according to tourism boards in the three cities.
During a jewellery exhibition in September, some three-star hotels tripled rates, while some four-star hotels doubled prices, data from local travel agency Million Tour Ltd showed.
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/see: http://www.reuters.com/article/2012/12/10/us-hongkong-hotels-idUSBRE8B915I20121210
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Ed
11 yrs ago
OTP.... how are the hotels 'greedy?' It's supply and demand... you take what you can get... and when you are full you can get more than you'd normally get... I don't blame the hotels for this...
Serviced apartments don't benefit because unless they have an expensive hotel license the minimum rental period is one month...
Some serviced apartments do have hotel licenses - and of course their daily rates are right up there with hotel suite rates...
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You see from the article that customers are beginning to turn away from HK, because the High hotel rates are scaring them off.
HK landlords tend to do the same thing, they raise rates aggressively, even if it means losing good tenants. I think they are becoming like Wall Street ibankers:
+ Short term greedy, instead of
+ Long term greedy
I think Long term greedy is smarter
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Have you memorised the Rules of Acquisition yet?:
http://www.youtube.com/watch?v=hG0ipvIoFZs
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Umm....I'm not sure I like being described as greedy. I like good tenants to stay put and if that means a below market rent so be it. It's cash flow that pays the bills.
Question: who is being greedy here - the hotels for charging what the market will bear or the customers who are complaining that they can't get away with paying below market rates? Let the market sort it out.
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The conference business only benefits airlines and hotels and creates a few low tech jobs. Doesn't really bring that much to HK. Glad to hear the hotels are gauging.
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At least for once HKers cannot blame mainland Chinese for the higher prices. Or they're actually celebrating? Until conventioneers stop calling.
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For those bankers and landlords here, who may be memorizing the Rules of Acquisition as a holiday project...
Here's some help:
http://www.youtube.com/watch?v=UIBT-JYiCuE#
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Ed
11 yrs ago
Actually the article does mention the influx from China as a reason for the higher hotel prices
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Thinking back to just before and just after SARS when hotels were leaving whole floors unserviced becuase there were not enough visitors to Hong Kong. If people expect hotels not to charge what the market will pay in good times, presumably the same people should expect guests to pay more than the market requires in bad times - any other stance is a double standard and I only like those when they work in my favour.
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Ah yes,
But you guys are forgetting how people actually behave in reaction to what they may think is price gouging:
+ They cancel or shorten future trips
+ They send fewer people, or tele-commute
+ They try new (cheaper) hotels in "less convenient" locations
+ They seek alternatives (serviced offices, flats) for longer stays
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Two related things happened today:
A/ I had lunch with an Australian friend at his hotel. Before he stayed in Central, and this time he has moved to Kowloon, which was easier for me
B/ I attended an event at the Asia Society this morning: it was a Simul-cast involving a single meeting taking place Monday evening starting at 8:30pm in NYC, and 9:30am in HK. There was a group of speakers addressing audiences in BOTH locations. And I would say that it worked very well, and we will see more of this sort of event, requiring less travel (and fewer hotel rooms.)
Funnily enough...
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Ed
11 yrs ago
OTP: I was in Rome a few months ago and checked into a hotel near the coliseum that cost around USD250 per night... it was rather small and at best 3 star... yet it was fully booked... as were most other hotels nearby....
For 250 in HK you can still get a pretty decent room. I stayed at the Island Pacific last week for around 200 per night... it was a far better value....
And if you want expensive hotels try Singapore... there's not much available for under 200 there...
No doubt some people are not coming to HK due to high hotel prices... but obviously loads continue to flood in - particularly on weekends when the prices spike considerably vs weekdays...
I believe that is because HK is being flooded by mainlanders who travel to HK spending stimulus money that is flowing into China on shopping for luxury goods because HK has no sales tax....
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New hotels are popping up in "new" areas-
I visited the Rosedale in TKT yesterday, and it's definitely a step-up from the old hotel around the corner:
in chinese:
http://zh.hotels.com/ho401225/rosedale-hotel-kowloon-jiu-long-xiang-gang/
The old Teahouse hotel:
http://www.orbitz.com/hotel/Hong_Kong/Hong_Kong/Bridal_Tea_House_(Tai_Kok_Tsui_-_Li_Tak_Street)_Hotel_Hong_Kong.h375711/
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