How will Hong Kong fare in coming rebound?

As China and its Hong Kong Special Administrative Region, ended a requirement for incoming travelers to quarantine, marking an end to the country’s strict “zero-COVID” policy, the question for hoteliers is how quickly business will return.

Hotel Investment Today recently reached out to Girish Jhunjhnuwala, founder and executive chairman of Hong Kong-based Ovolo Hotels, to get his perspective and forecast for the rebound.

Hotel Investment Today (HIT): How quickly will business rebound and what are your expectations for Ovolo properties in Hong Kong? And how will you go to market differently?

Girish Jhunjhnuwala (GJ): We need to be realistic in expecting the full rebound too soon. People will start coming back this spring for major events like Rugby 7s, Art Basel and different exhibitions like the Jewellery Show and HOFEX.

We expect a full rebound by the summer of 2023.

Ovolo responds quickly to market changes, that’s why we’ve been so successful over the pandemic with Quarantine Concierge. Guests’ pain points have changed – it is no longer room entertainment, but helping guests explore the city in a fun and effective way. We’re supporting our guests’ adventures by providing conveniently located accommodations, and signature perks like a social hour, in-room mini-bar, inclusive breakfast and catering with great attention to a vegetarian lifestyle. Flexibility is key. We're expanding our approach quicker than ever before.

HIT: How long before a return to profitability for your HK properties?

GJ: Profitability aligns with the return of tourism and events. We’re seeing a positive pick-up in booking across different sectors – both for business and leisure.

Our “long-stay” properties like The Sheung Wan and The Aberdeen By Ovolo have been performing consistently well with an occupancy of over 80 % with many people remaining in Hong Kong for business and education.

All that goes to say, our brand is consistent, but the strategy is different for each hotel to bring the profits back: consistently and pro-actively.

HIT: Will this news shake lose any M&A in the market and, if so, how?

GJ: Ovolo is always open to opportunities across the world. Being a hotel group with origins in Hong Kong, expansion across the Asia Pacific region is of great interest to us. With the full removal of restrictions, we’re seeing the international curiosity in Hong Kong returning, right alongside M&A processes.

Importantly, when it comes to M&A, we have to also consider hotels’ performance during COVID-19 is still fresh in everyone’s mind. It won’t be difficult to show a great performance once the tourists and business travelers are flowing back into the city, but how well will the same hotels perform under tough, unpredicted circumstances is definitely to be considered.

HIT: Do you expect to see any hotel development in the market?

GJ: As the market starts to recover after the effects of the pandemic, we will see hotel developments in Hong Kong, although not in the immediate future. In the short term, we can expect to see major conversions taking place in the market.