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HONG KONG: If you see groups of Taiwanese yuppies hanging around Hong Kong's major shopping and entertainment districts, don't be surprised.
Chances are you might encounter a growing number of such wealthy young visitors when you do your shopping or visit your favourite nightspot. They may even become a fixture of the city's cosmopolitan landscape, courtesy of a Taiwan-friendly gesture by the Hong Kong government.
From next month, Taiwanese passport holders with mainland travel permits can stay for a maximum of one month in Hong Kong, up from seven days. Those without mainland permits can register online and need not apply for Hong Kong visas through travel agencies in Taiwan, according to the arrangements announced recently by Financial Secretary John Tsang Chun-wah.
"The move will certainly go a long way towards enticing more young people in Taiwan, mostly in their 20s, to come here," Hong Thai Travel Services director Jason Wong Chun-tat said. "The Hong Kong market is very attractive to them because of the similarity in culture — aside, of course, from shopping and the city life here, which is more glitzy than theirs." The new policy would encourage them to increase the frequency of their visits to Hong Kong, as well as attract new visitors, he added.
Wong said young Taiwanese were likely to travel on package tours and provide a significant boost to Hong Kong's hotel occupancy rates.
There have been no firm forecasts on the impact of the visa policy change, but analysts are united in saying that the city can expect an increase this year from the 2.2 million Taiwanese arrivals recorded last year by the Hong Kong Tourism Board.
"This development will certainly help increase tourist arrivals from Taiwan significantly, and the hotel sector will be one of the major beneficiaries. But the full impact is unclear," Chan Cheong-kit, a director at Lanbase Surveyors, which provides consultancy services in property valuation and land administration works in Hong Kong, said.
Chan said the prospect of increased Taiwanese visitor arrivals may not necessarily spur developers to build hotels that will specifically cater to this growth segment.
"They will wait and see if demand from Taiwanese tourists grows significantly," he said. "They may then expand their hotel portfolio depending on growth from this sector — aside, of course, from catering for more arrivals from the mainland."
But with more control points at Hong Kong's border with the mainland being opened, coupled with the likelihood of more visitor arrivals from Taiwan, demand for more hotel rooms in Hong Kong was bound to grow further, spurring more hotel developments, he said.
Chan noted, however, that the supply of land for hotel projects was not keeping pace with growing demand for rooms.
"The government should put more sites for hotels up for sale in urban areas. It should be more proactive in doing this. At the moment, hotel rates can be likened to prices of seafood in the sense that rates can change every day because of tight supply," he said, adding that while the government has several sites in its land application list suitable for hotel developments, developers have virtually ignored them because of their locations outside urban areas.
Alnwick Chan, executive director at property agent Knight Frank Hong Kong, said most sites being offered were not in established tourist areas which explained the lack of interest from developers. Interest would be much keener if more sites were offered in urban areas, such as a plot in Queen's Road East in Wan Chai.
Emperor International recently won the tender for a 7,717 square foot site at 373 Queen's Road East, on which it plans to develop a 220-room hotel. It outbid Sino Land, Cheung Kong (Holdings) and Magnificent Estates for the site.
"There are actually very few available sites in the urban areas. And if there are any, I doubt very much if the government will offer them for hotel developments because its main focus right now is on meeting the shortage of residential units," Alnwick Chan said.
"Besides, there are no loud complaints against hotel rates being astronomically high, unlike in the residential sector."
He said that for many developers there were more lucrative options.
"Unlike residential projects, hotels often involve long payback periods and a reliance on the support of a hotel chain, aside from other issues like fitting out and maintenance. In this sense, most developers prefer to do residential projects rather than hotels," he said.
Chan Cheong-kit said that in spite of the shortage of sites in urban areas, some developers still found ways of undertaking hotel projects.
"My company has been engaged by some landowners to apply to the Town Planning Board for approval for small hotel projects of about 50 rooms. Developments of small-scale hotel projects are ongoing and I believe this trend will continue because of bright prospects of more tourist arrivals from [mainland] China, which will be boosted further by visitors from Taiwan," he said.
Because of difficulties in assembling sites in urban areas and buying up old buildings with multiple owners for redevelopments, developers with hotel development plans opted for sites ranging from 3,000 sq ft to 5,000 sq ft, he said.
"These developers who want to build more hotels would like very much to buy, but this depends entirely on availability. If not multi-owned, some sites are family-owned and are often not for sale," he said. — SCMP
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