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Hong Kong retains title as Asia’s most expensive city for business travellers for second year, as inflation drives up costs

HONG KONG — Hong Kong has taken the top spot as the most expensive destination in Asia for business travellers for the second year in a row, as inflation pushes up costs as the city emerges from pandemic restrictions, a survey has found.

Pedestrians crossing a street in the central district of Hong Kong.

Pedestrians crossing a street in the central district of Hong Kong.

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HONG KONG — Hong Kong has taken the top spot as the most expensive destination in Asia for business travellers for the second year in a row, as inflation pushes up costs as the city emerges from pandemic restrictions, a survey has found.

The average business trip to the city last year cost US$520 (S$695) per day, down 0.7 per cent compared with 2021, according to an annual report from management consultants ECA International.

“Hong Kong has always been one of the most expensive Asian locations to visit on business and remains so,” said Lee Quane, regional director Asia at ECA International.

“Business travel costs decreased in 2022, albeit slightly, due to low volumes of business travel demand caused by the Covid-19 pandemic and a poorly performing economy.”

The overall daily cost of visiting Singapore was slightly cheaper at US$515. But it overtook Tokyo, at US$424 per day, as the second most expensive city in Asia. Shanghai and Seoul rounded out the top five.

“Singapore overtook Tokyo to become the second most expensive city in Asia to visit for business in 2022,” Mr Quane said.

“Business travel in the city picked up earlier than most other regional locations. This increased demand contributed to rises in hotel accommodation costs, and those associated with other daily essentials consumed by business travellers also increased faster than other locations in the region, propelling it to second place in the region and 19th place worldwide.”

Inflation was among the factors that contributed to significant increases in business travel costs.

The firm considers the average cost of hotels, meals, drinks, laundry, taxi rides and other daily necessities.

Still, Hong Kong was 35 per cent cheaper than the world’s most expensive city for business travellers, New York, at US$796.

The firm said Hong Kong remained the most expensive city in the region despite depressed business travel, amid restrictions and social-distancing measures.

The study analysed data from 457 locations in 196 countries, examining the cost for three- to five-star hotel rooms, meals, laundry, alcoholic and soft drinks, incidental expenses and taxi rides.

Tourism sector lawmaker Perry Yiu Pak-leung said the price of hotel rooms depended on supply and demand in the market, and business travellers were typically high-end.

“The shortage of manpower and high labour costs will increase operating costs further,” Mr Yiu added.

Winnie Chan Wun-yin, association manager at the Federation of Hong Kong Hotel Owners, said the high cost of business travel was due to room rates, meals and transport. She said operating costs had also increased, pointing to electricity charges, which had risen by between 5.5 per cent and 6.4 per cent.

Timothy Chui Ting-pong, executive director of the Hong Kong Tourism Association, said daily expenses of business travellers, including hotel room costs, would typically amount to HK$4,000 (S$681).

“Business guests generally choose famous hotels on both sides of Victoria Harbour, plus meals and limo car service,” Mr Chui said.

The city is on the path of recovery following the cancellation of Covid-19 restrictions on international arrivals in December and the full resumption of quarantine-free travel with mainland China earlier last month.

Authorities implemented the city’s most stringent anti-epidemic measures, including a 21-day mandatory hotel quarantine, in December 2021.

The quarantine period was then cut to two weeks for fully vaccinated arrivals in February and seven days in April last year before the policy was scrapped in September.

Government figures showed that Hong Kong had 319 hotels in 2021, providing 88,614 rooms. The previous year it had 311 hotels and 86,700 rooms.

According to official figures, the occupancy rate in January this year was 66 per cent among 319 hotels.

A report published last November by property consulting firm Knight Frank said 10 hotels with 3,013 rooms closed in the three years since 2019, including the 869-room Excelsior in Causeway Bay.

The Hong Kong Tourism Board revealed on Wednesday that 1.46 million people visited the city in February — the first time the monthly figure has surpassed 1 million since the outbreak of the pandemic in early 2020.

But it admitted last week the recovery pace would depend on several factors, including talent recruitment across a depleted travel sector, regional competition, the global economic outlook and the strength of the Hong Kong dollar, which had weighed on visitors’ budgets. SOUTH CHINA MORNING POST

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hong kong business travel inflation

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