Clement Kwok, CEO of Hong Kong and Shanghai Hotels, said easing border restrictions and introducing vaccination cards will be critical to revitalizing the hardest-hit hotel industry.
His comments come after the company, which owns and operates a number of luxury hotels, reported a net loss of $ 250 million for 2020.
Kwok told CNBC that the group has reopened its luxury brand Peninsula Hotel in all locations except New York, but it is still at 20% to 40% occupancy. A more meaningful recovery depends on easing travel restrictions due to Covid.
“Further recovery will depend on the implementation of travel protocols and the increase in vaccinations,” Kwok said Thursday.
“We certainly hope that as vaccinations increase, there will be a protocol that if vaccinated, travel restrictions may be lower,” he said, referring to so-called “vaccination cards” for vaccinated travelers. “We hope so and look forward to it,” said Kwok.
A vaccination record is digital documentation that shows that a person has been vaccinated against a virus, in this case Covid-19.
The exterior of the Peninsula Hotel in Hong Kong.
Prism of Dukas | Universal Images Group | Getty Images
Currently, the group, whose flagship hotel is in Hong Kong, is largely dependent on local businesses and promotes a range of stays and experience packages.
“We were able to maintain a certain level of business during this time,” said Kwok. “But what we really need most is to see an opening.”
Putsch halts development of Yangon
In Southeast Asia, the military coup in Myanmar, which led to weeks of bloody protests, brought the construction of a planned new plot of land on the peninsula in the capital Yangon to a standstill.
“There’s really not much work going on in Yangon right now,” said Kwok, noting that the group would rethink both its immediate and long-term plans for the property.
If you know you will be investing for 100 years, you will have highs and lows during that time, and you need to have the staying power to get through the lows for the highs to come.
Managing Director, Hong Kong and Shanghai Hotels
The budget for the renovation of the hotel, which is located in the former Myanmar Railways Company building, a Grade I listed building from the 1880s, has already increased from $ 90 million to $ 130 million.
The property is adjacent to Yoma Central, a larger commercial and residential development that is also in the works.
“These cost increases were not the material that affected the work and supply chain until Covid,” said Kwok. “But even now that the website is closed, we have to assess what impact this will have on costs.”
“Full steam ahead” in London, Istanbul
Even so, Kwok said the group is “in full swing” with the opening of two additional locations in London and Istanbul.
While construction on the properties has been delayed due to Covid restrictions, Kwok said the delay was a few months rather than years and both locations are well on their way to opening in 2022.
“We don’t want to delay any of the openings in view of the timing of the global recession,” said Kwok.
“When we go to a hotel, we think of 100 years. If you know that you will invest 100 years, you will have ups and downs during that time, and you must have the staying power to get through the lows, with the ups come. “