Hong Kong newspaper, the South China Morning Post reports that travel industry analysts and industry figures say that the outlook for Hong Kong’s major property developers are still dim after the hotel and retail industries took a huge hit last year.
The city’s three biggest commercial property landlords unveiled significant profit plunges for 2020 as travel regulations halted visitors from their usual holiday roaming, leading Hong Kong’s economy to a virtual standstill.
Raymond Kwok Ping-luen, Chairman and Managing Director of Sun Hung Kai Properties, said, “various domestic and external challenges will continue to weigh on the economy of Hong Kong in the short term.”
Sun Hung Kai Properties owns a portfolio of Hong Kong’s top hotels such as the Four Seasons, Ritz Carlton, and the Hyatt Centric Victoria Harbour and also owns luxury shopping malls, such as the IFC Mall in Hong Kong’s Central district.
Kwok said that, “The shopping center business will continue to be affected until the COVID-19 travel restrictions with the mainland are removed and the hotel business is likely to remain tough as long as cross-border global travel is restricted.”
Irene Lee Yun-lie, Chairwoman of Hysan Development echoed Kwok’s comments and said that, “as we enter the second month of 2021, we still have little clarity on our future.”
Hong Kong has closed down its borders to tourists since last year to contain the pandemic, in which such restrictions are likely to continue for the time being. Because of its travel restrictions, Hong Kong visitor arrivals dropped 94% from 2019. The 2020 visitor arrivals of 3.57 million people were the lowest in the last 36-years.
Alvin Cheung Chi-wai, Associate Director at Prudential Brokerage commented on the city’s predicament and said, “The developers are clearly not optimistic. They won’t get out of the tunnel until the city’s economy has really recovered.”
Although the Hong Kong government is trying to stimulate domestic demand and plans to offer its citizens $650 USD in digital vouchers to motivate spending, most analysts are unsure of whether a short-term marketing program can change long-term behavior.
Raymond Cheng, Managing Director at CGS-CIMB Securities notes that, “There is still a lot of uncertainty for the developers. Their hotel business will be quite challenging in particular. The city’s retail for sure will be better this year with the coming government coupons and easing for social distance measures. But until the cross-border restrictions are lifted, we cannot see a full recovery.”