Easing border restrictions and introducing vaccine passes will be essential to help revive the hard-hit hotel industry, says the CEO of Hongkong and Shanghai Hotels Clement Kwok.
His comments come after the company, which owns and runs a slew of luxury hotels, reported a net loss of $250 million for 2020.
Kwok told CNBC the group has reopened its luxury Peninsula Hotel brand in all locations, except for New York, but continues to operate at 20%-40% capacity. Any more meaningful recovery will depend on an easing of travel restrictions due to Covid.
“The continued recovery is going to be dependent on travel protocols being implemented, increase in vaccinations,” Kwok said Thursday.
“We’re certainly hoping that as vaccinations increase, there will be a protocol whereby if you are vaccinated maybe the travel restrictions would be less,” he said, referring to so-called “vaccine passports” for immunized travelers. “That’s what we’re hoping for and looking forward to,” Kwok said.
A vaccine passport is digital documentation that shows an individual has been vaccinated against a virus, in this case Covid-19.
The exterior of Hong Kong’s Peninsula Hotel.
Prisma by Dukas | Universal Images Group | Getty Images
Currently, the group whose flagship hotel is in Hong Kong, has been largely dependent on local business, promoting a series of staycations and experience packages.
“We’ve been able to maintain a certain level of business during this time,” said Kwok. “But really what we need most of all is to see an opening up.”
Coup halts Yangon development
“Really, not much work is going on in Yangon right now,” said Kwok, noting that the group would be reassessing both its immediate and long-term plans for the property.
Already the budget for renovating the hotel — which occupies the former Myanmar Railways Company building, an 1880s heritage property — has ballooned from $90 million to $130 million.
The property sits adjacent to Yoma Central, a larger, commercial and residential development that’s also in the works.
“Those cost increases had not been that material until Covid, which has affected labor and supply chain,” said Kwok. “But also now, with the site being closed, we’ll have to assess what the cost implications of that are going to be.”
Still, Kwok said the group is “full steam ahead” on the opening of two additional locations in London and Istanbul.
While construction on the properties has been held up due to Covid restrictions, Kwok said the delay was by a matter of months, not years, and both locations remain on course to open in 2022.
“We do not want to delay any of the openings in terms of timing with the global recession,” said Kwok.
“When we go into a hotel, we’re thinking of 100 years. If you know that you’re investing for 100 years, you’re going to have highs and lows during that period, and you need to have the staying power to get through the lows so that the highs will come.”