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Exclusive | The Peninsula sees challenges as Hong Kong luxury hotel chain seeks to counter ‘negative perception’ hobbling tourism industry

  • There is still a negative perception about Hong Kong among travellers from the US and Europe, slowing the city’s tourism rebound, CEO says
  • The Kadoorie-controlled group, which opened The Peninsula in London and Istanbul last year, will freeze plan in Myanmar to focus on these new hotels

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​Clement Kwok King-man, chief executive officer of The Hong Kong and Shanghai Hotels Limited, at his office in Central on 20 March 2024. Photo: Jonathan Wong.
Cheryl Arcibal
Hong Kong’s hospitality sector is likely to face more challenges ahead as tourist arrivals struggle to return to pre-pandemic levels, delaying a recovery in occupancy and tourism spending, according to Hong Kong and Shanghai Hotels (HSH), which owns The Peninsula hotels.
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“International travellers from the US and Europe to Hong Kong and mainland China are low,” Clement Kwok, managing director and CEO of HSH, said in an interview. “There is still a negative perception in those markets about Hong Kong. We are trying to overcome it, so that people will come back to Hong Kong and experience all of the good things it has to offer. That will take some time.”

Trade wars, economic crises and geopolitical conflicts would not be good for international travel business, he said in general, issues that have plagued US-China ties in recent years and hurt Hong Kong for its role as a “superconnector” and regional financial hub.

The city’s hotel industry enjoyed some recovery last year as Covid-19 travel restrictions were belatedly dismantled, helping lift monthly hotel occupancy rate to as high as 87 per cent from 75 per cent in 2022, according to data compiled by Colliers. Before the social unrest in 2019, local hotels filled 94 per cent of the rooms.
The Hong Kong Tourism Board expects 46 million tourists to visit the city this year, representing a 35 per cent increase from 2023. The forecast suggests the recovery is some way off the 65 million level recorded in 2018. Meanwhile, spending per overnight visitor is expected to shrink by as much as 16.4 per cent to HK$5,800 (US$741) this year, it added.
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HSH, which now operates 12 hotels globally, turned around with a profit of HK$146 million last year, from a HK$488 million loss in 2022. The group added a 190-room hotel in London and a 177-room asset in Istanbul to its network in 2023. HSH is controlled by the Kadoorie family, an Iraqi-Jewish clan that first arrived in Hong Kong more than 140 years ago.

The recovery in business at The Peninsula in Hong Kong, Shanghai and Beijing has trailed other hotels in the group when compared with 2018 levels, Kwok said. “When my teams travelled to the US and Europe to talk to travel agents, saying ‘we want to promote Hong Kong and China,’ the reaction was not so strong,” he said. “We are trying to change that.”

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