Online booking co Arbitrip: Hong Kong tourism collapsing

Benny Yonovich

The demonstrations against the regime in Hong Kong have caused huge damage to business tourism with flights canceled and hotel prices plunging.

The protests in Hong Kong, which began in March, have caused huge damage to its tourism industry. The demonstrations even led to the closure of the airport, and all this is reflected in the cancellation of flights and hotel bookings, to the point that hotel employees have been placed on forced vacation due to the fall in demand. The demonstrations in Hong Kong began in the wake of the regime's intention to change Hong Kong's extradition law, to allow for suspects to be extradited into the hands of the Chinese authorities (legislation that since been withdrawn). Over time, the demonstrations became a protest focusing on concerns about the erosion of democracy.

This fall in tourism has also led to a 40% plunge in the prices of hotels in Hong Kong, according to Israeli travel technology company Arbitrip, which offers an online booking platform for business travel. "The protests in Hong Kong are destroying tourism - especially in the business sector," says Arbitrip CEO Benny Yonovich. Moreover, he points out that payments already made for hotels won't necessarily be refunded.

Arbitrip is an enterprise platform that helps corporations manage their business travel. For each business trip, Arbitrip finds the right hotel, at the best price, while enabling the corporations to manage the process, payments and costs in one place.

Two airline companies operate direct flights from Tel Aviv to Hong Kong - El Al and Hong Kong carrier Cathay Pacific. Between the start of 2019 and the end of July, passenger traffic (in both directions) of direct Tel Aviv - Hong Kong flights, totaled about 156,000 passengers - growth of 14% compared with the corresponding period of 2018; growth that has now come to a halt. With the escalation of the demonstrations two weeks ago, Hong Kong's airport was completely shut down for planes taking off and chaos reigned. Cathay Pacific experienced an upheaval, which led to the resignation of its CEO Rupert Hogg and a dramatic fall in the company's share price. Other carriers have not sat idly by to what is happening in Hong Kong, and United Airlines, for example, has suspended its Chicago - Hong Kong flights from 9.9.19.

Measures to attract business tourists

"Israeli companies that do business with Hong Kong are engaged for the most part in the financial world, diamonds and cybersecurity," says Yonovich. "The extreme changes in Hong Kong might be expressed in delays in deals and projects due to the uncertainty prevailing in the region. Hotels have also begun panicking and that influences prices."

Yonovich provides an example of the price per night over the weekend in the luxurious Conrad Hotel - a hotel located in one of the districts where demonstrations are taking place. On its website, the price for an overnight stay is US $195, 40% less than the regular price in this hotel, and similar price differences can also be found in the Marriot International and Shangri La hotels.

"Although the wave of cancellations mainly influences the hotels in Hong Kong that have for sure suffered most of the financial losses but in certain instances Israeli companies have also lost money, in the event that the booking was made under non-refundable conditions or the cancellation window had ended. In these instances, some of the hotels agreed to refund the customers but others insisted on taking full payment for the booking which was not used," adds Yonovich.

The business community represents a major market share of incoming tourism to Hong Kong. Moreover, Yonovich says that Hong Kong's Ministry of Tourism has initiated measures to attract business tourism. These include investments in conference and exhibition centers as well as a range of tourist attractions. Business tourists also spend more. According to Arbitrip, the average price per night in Hong Kong for a tourist is NIS 620 compared with NIS 735 per night paid by business travelers (on regular days). The business tourist stays an average of 2.9 nights.

In 2018, the number of visitors who took part in conferences and exhibitions in Hong Kong totaled 1.97 million. Due to the protests, last week's ACTE Global Summit in Macau, a huge conference, was cancelled. In announcing the cancellation, the organizers spoke about the need for caution and the safety of the conference participants. If that was not enough, more than 20 countries have issued travel warnings regarding Hong Kong including the US, Australia and Japan. At this stage, Israel has not yet issued a travel warning for Hong Kong.

Cathay Pacific's Airport Operations Manager in Israel Tzviki Avramovich said, "The events in Hong Kong have not had any influence on demand for vacation flights or even on demand for flights from the business community. Most business travelers have an ongoing connection with Hong Kong and business activities are carrying on as usual. Cathay pacific is operating securely and safely for the benefit of all its passengers and is conducting completely routine operations on all its routes. Occupancy on the route between Tel Aviv and Hong Kong remains as high as the days prior to these events."

Published by Globes, Israel business news - en.globes.co.il - on September 8, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Benny Yonovich
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