Cheap Zhuhai hotels not yet a challenger

Hospitality experts say longer border opening hours would have a limited impact on the industry

Lower room rates in Zhuhai and the possibility of keeping border crossings open for longer would have little effect on the hotel industry here, hospitality experts and an industry insider say.
The latest quarterly review of Greater China hotels by consulting firm HVS found the difference in average room rates between hotels here and Zhuhai had reached 1,000 patacas (US$125).
A night in a Macau hotel cost an average of 1,486 patacas in the fourth quarter of last year. Across the border, the price was 355 yuan (453 patacas), the report said.
The price gap does not surprise the secretary-general of the Macau Hoteliers and Innkeepers Association Kenny Cheung Kin Chung.
He told Business Daily that room rates were influenced by factors such as the balance of supply and demand, Macau’s appeal to visitors and inflation.
The annual rate of inflation stood at 6.11 percent last year but was 2.6 percent in mainland China.
“Macau has a very good tourism image and the central government has also said they want Macau to become a global tourism centre,” Mr Cheung told Business Daily.
He said the city had “its own characteristics with elements of West meeting East… and the service management of the hospitality here is at a quite high level, so the visitors will know how to choose”.
Two academics also said Zhuhai did not pose a big threat.
“It will all depend on the types of customers Macau wants to attract,” said Gao Yan, a tourism professor at the City University of Macau.
“High-end travellers usually care about the experience the hotel can provide while customers with limited budgets eye the price.”

Holiday headache

Macau Polytechnic Institute gaming and tourism professor Edmund Loi Hoi Ngan said: “Those who stay overnight in Macau usually have a high spending power. The room rate here is acceptable and the occupancy rate remains very strong”.
“One problem in Macau is that the visitors cannot find accommodation during holidays, as well as speculation over the room rates.”
Mr Loi was referring to soaring prices charged by hotels during peak periods, such as the Chinese New Year holidays.
Three-star hotels were charging more than 2,600 patacas a night during the festival, according to data from the Macau Government Tourist Office.
The occupancy rate in January was 82.9 percent, up by nearly 4 percentage points in year-on-year terms.
Ms Gao warned that mid-priced hotels with room rates of about 1,000 patacas a night might be concerned when border crossings stay open longer or even around the clock.
“They charge visitors at a certain level but most do not provide services matching their standards,” she said.
“When the border opens for 24 hours, the mainland will draw some guests away from such hotels.”
Chief Executive Fernando Chui Sai On said on Monday the government would strive to open the border around the clock.
There was a temporary two-hour extension in the operating hours of the Gongbei border crossing during last week’s three-day Ching Ming festival.
Mr Cheung said members of his association were not concerned by the border staying open for longer periods.
“It may draw some travellers away but at the same time it also helps bring more people to come and stay here,” he said.
Mr Cheung said the city needed more budget hotels to better suit all tourists.
Macau had just 1,500 budget hotel rooms in January, accounting for 5.8 percent of the city’s 26,000 hotel rooms, official data show.