Several Hong Kong Hotels Force Workers To Take Involuntarily Leave As Occupancy Rates Slump

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This week John already wrote about hotel rates going down in Hong Kong, and today local newspapers report that many hotels, including the big chains, are forcing staff to take annual or unpaid leave.

The South China Morning Post says the properties, including The Mira as well as the Intercontinental Hong Kong, are reducing their staff on duty, mostly in the housekeeping department.

It was just a matter of time until the situation in Hong Kong would have an impact on the bottom line of several businesses, first and foremost the hospitality industry.

Businesses react quickly to stem the challenges and in the case of hotels as John wrote two days ago the first measure when bookings collapsed was to cut rates and hope to drive demand that way. Even traditionally more expensive hotels, such as Intercontinental or Conrad, have cut their rates quite a bit.

It is better to sell rooms at lower rates but manage to fill the hotel as housekeeping and other hotel staff are on payroll and need to be occupied.

The South China Morning Post (access here) wrote today that some properties have now taken additional measures, forcing staff to their annual, or in some cases unpaid, leave.

Hong Kong’s hotel workers are paying the price for nearly three months of anti-government protests, with many placed involuntarily on paid and unpaid leave as occupancy rates plummet.

The Post has learned that the Mira Hong Kong, situated in the bustling tourist district of Tsim Sha Tsui, has become the latest of the city’s high-end hotels to put employees on leave, with scores of housekeeping staff at the 492-room hotel set for an unwanted break.

A few streets away in the same district, the waterfront 503-room InterContinental Hong Kong hotel has asked permanent members of staff to take annual leave and unpaid leave to save money, with 10 hotels operated by tycoon Li Ka-shing’s CK Asset Holdings reportedly making a similar move. …

A worker at the Mira, who wished to remain anonymous, told the Post the company had assigned annual leave and other holidays for staff on the roster this month without asking them.

She estimated one-third of the some 100-strong housekeeping team were being asked to take a break, as its occupancy rate fell to between 50 and 60 per cent.

Commerce minister Edward Yau Tang-wah earlier said the number of inbound tourists dropped more than 30 per cent for the first 10 days in August, and industry figures said the protests could be worse for Hong Kong than the 2003 Sars outbreak.

According to the Catering and Hotel Industries Employees General Union, the InterContinental Hong Kong sent an email to staff, saying the protests had hurt the economy and its occupancy levels were down considerably.

“It is only right that we take ‘corrective measures’ to protect our payroll and prevent our bank balance from slipping further in the red,” the email, which the Post has seen, said.

Under the plan, some staff, including department heads, are to take one day of annual leave and two days of unpaid leave in August. Next month, all permanent staff are being forced to take two days of annual leave and another two of unpaid leave. …

Meanwhile, CK Asset has reportedly asked staff to take unpaid leave at 10 hotels, including the Harbour Grand Hong Kong in North Point, and the Harbour Plaza 8 Degrees in To Kwa Wan.

Back when the SARS outbreak affected Hong Kong, hotel rates and air fares plummeted, and as the article says it might be possible to see this again – maybe worse than before.

The fact that the hotels and their owners are now targeting their lowest paid staff to bear the cost of this is sad and unfortunate.

These might be hard times but it doesn’t send a positive signal when in the same week Hong Kong’s richest man, tycoon Li Ka-shing spends $5 Billion in an acquisition of a pub chain, yet his local companies force low paid housekeepers and line workers to take unpaid leave. That shows quite lack of a moral compass right there!

Conclusion

I personally wouldn’t hesitate at all to visit Hong Kong, but I can understand that leisure travelers are especially cautious about the situation. Generally speaking, the best solution is to monitor the travel advisories your respective government publishes and once in Hong Kong apply common sense and try to circumvent hot spots.

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