Though the coronavirus pandemic has dealt a heavy blow to Hong Kong’s tourism industry, the head of a luxury hotel group remains optimistic.

Clement Kwok, the CEO of Hongkong and Shanghai Hotels – the parent company of the Peninsula Hotels, attributed his optimism to chairperson Sir Michael Kadoorie. “When he looks at a hotel, he pictures changes in the next 50 or 100 years. There is only one thing which he does not compromise on – the brand of Peninsula which is known for its high quality,” said Kwok.

The Peninsula Hotels currently has 10 branches across the world, including metropolitan cities such as Shanghai, New York and Tokyo. Six of which have halted operations last year, resulting in an annual loss for the group.

In Hong Kong, the room rates of the five-star hotel have dropped by 40% to less than HK$3,000 (US$386) per night. Business now relies mostly on local residents and is doing relatively well compared to other branches overseas as Hongkongers take advantage of the low prices, said Kwok. The hotel has also seen a recent surge in bookings as the government relaxed social distancing rules and the Easter Holiday nears.

Yet offering staycation deals is only a short-term strategy and local patrons cannot be compared to the scale of foreign tourists that the hotel used to cater to. “Business recovery in the long run depends on when international travel can resume,” said Kwok, who cannot predict when the economy will fully recover.

Hong Kong’s mandatory requirement of three-week quarantine for travelers, one of the longest in the world, also discouraged tourists from visiting, he noted.

Yet the hotel group, which has witnessed decades of development, including the Second World War, is confident in its resilience. Its chairperson Sir Michael Kadoorie cast his eyes far into the future. “You cannot expect a return to your investment within 50 or 100 years. In almost a century of history of the hotel, the world has gone through many challenges. The key is whether the company has the ability to survive the tough times,” he told Kwok.

Due to his forward-thinking vision, the company did not change its long-term strategy because of the pandemic. The group are building and opening new hotels in London, Istanbul and Yangon.

Kwok admitted the projects are not going great, as the constructions are hampered by delays and costs overrun. Completion of the hotels in London and Istanbul have been postponed till 2021, while the project in Yangon is suspended due to the political situation on the ground. To maintain the financial health of the group, the company will focus on completing these projects before making further investments.

The group will continue to build the best hotels in the best places, said Kwok, adding that it would not limit its scope to Asia.

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