Shangri-La Asia Ltd, Starwood Hotels & Resorts Worldwide Inc and other Asian hotel operators, already bracing for a slowdown from the Iraq war, face a new worry -- a respiratory disease that killed at least 18 people.
Hotel bookings have fallen by a fifth in Hong Kong, where more than half the victims have been diagnosed, and by the same level in Singapore, where the government quarantined as many as 740 people in their homes, Asiatravel.com Holdings Ltd said.
"After the airlines, the industry that is going to be hardest hit is us," said Tony Virili, group general manager for Japan at Accor SA, the world's fourth-largest hotelier. Accor said two weeks ago it may scale back expenditure on new hotels and rooms by two-fifths as markets decline.
At stake is an industry still reeling from the impact of a terrorist attack in Bali and a string of recessions. In Singapore, where tourism makes up a 10th of economic output, hotel occupancy had already fallen to 74.1 percent at the end of last year, down 14.3 percentage points from a November 2000 peak. Shangri-La said 1,400 rooms were canceled at its two Hong Kong hotels.
The respiratory disease has infected at least 487 people, including 39 in the US, after being carried by airline passengers to 15 countries in Asia, North America and Europe, according to the World Health Organization. Among those who may be infected is William Ho, the head of Hong Kong's Hospital Authority, Hong Kong health officials have said.
As governments warn against travel to more Asian destinations, hotel shares worldwide will keep falling, some analysts said. A Morgan Stanley International index that tracks hotels, restaurants and leisure stocks worldwide fell by a quarter in the past year.
Starwood, the world's biggest hotelier, lost a third of its value in the past year. Shangri-La fell about 6 percent while Raffles Holdings Ltd, which owns the 116-year-old Raffles Hotel in Singapore, fell by a fifth.
"What we have is more bad news," for the industry, said Cher Hung Jin, who manages about US$200 million at Daiwa SB Investments in Singapore. "It's never been a well-liked sector and all this news just means it's not about to change."
Both Singapore and Hong Kong are struggling to pick up from the twin recessions they each had in the past five years. Other Asian markets such as Indonesia are still trying to get foreign investors back following the regional financial crisis in 1997.
This week, White Plains, New York-based Starwood, which owns the Sheraton and Westin chains, withdrew its earnings forecasts after the war in Iraq sparked a decline in shares of travel-related companies. Analysts said a surge in last-minute cancellations makes it harder to forecast profit.
Asian hotel operators such as Hongkong and Shanghai Hotels Ltd, which owns the Peninsula in Hong Kong, said they have had some cancellations amid the spread of the disease, known as Severe Acute Respiratory Syndrome.
Symptoms include a fever of more than 37.8?C and coughing, difficulty breathing and pneumonia. Singapore reported its first death from the illness with 10 others in "serious condition."
"People are assessing whether they should travel on a day-to-day basis," said Scott Hetherington, Asia executive vice president at Jones Lang LaSalle Hotels in Singapore, a hotel brokerage and research firm.
Asian carriers have been stricter with passengers, hurting travel. Hong Kong's Cathay Pacific Airways Ltd and Singapore Airlines Ltd said they will turn away passengers with symptoms.
In Hong Kong, where tourism also makes up a 10th of the economy, 10 people have died and about 290 have been affected.
Hotels were further hit after authorities said they traced early victims of the respiratory disease to the ninth floor of a hotel in downtown Kowloon.
Throughout the city, surgical masks are increasingly being worn, especially in doctors' offices. Some expatriate families have pulled their children out of school temporarily on concern that the disease may spread -- and France, Italy and Argentina have withdrawn from an annual rugby tournament scheduled for this weekend.
"If the flu continues and escalates, it will be a killer" for tourism, said Marc Faber, managing director of Marc Faber Ltd, which has been managing investments in Asia for more than 20 years.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS