Hotels and guest houses to be used as temporary housing to aid operators, says Hong Kong government

William Cheng of Magnificent Hotel proposed to use hotels in noncore areas as temporary housing

On 25 November, Carrie Lam announced that the government is planning to grant operators the freedom to lease their hotel rooms and guest houses as temporary housing to keep them from breaking down during such an unprecedented time, reported the South China Morning Post.

The Hong Kong government’s strategy of transforming hotels and guest houses into temporary housing has been supported by veteran hotelier, William Cheng of Magnificent Hotel. Cheng said that hotels could charge a monthly rent between HKD4,000 (USD516) to HKD4,500 (USD580.5) per room. The scheme is expected to be launched soon, but no specific date has been reported yet.

William Cheng Kai-man, chairman of Magnificent Hotel Investments, welcomed the Hong Kong government’s project, mentioning that it could hamper some operators from going into liquidation during these strenuous times due to the COVID-19 pandemic.

Cheng said, “there are many hotels in non-core areas such as Tsuen Wan, Kwai Chung, Tsing Yi, and Tin Shui Wai, with hundreds of empty rooms, which can be used as transitional housing immediately and help these operators to stay afloat.”

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The average waiting time for public rental housing in Hong Kong, the world’s most expensive real estate market, has increased to 5.6 years, while family and single elderly applicants rise to 156,400. Consequently, deficient subdivided flats in poor urban buildings are unavoidable for these wait listers.

Hannah Jeong, head of valuation and advisory services at Colliers Hong Kong, stated, “If the government can utilise the lower class hotels and guest houses, it will provide a boost to this struggling sector.”

Cheng said that if the government leased the whole property for transitional housing, hotels could take on just over HKD130 (USD17) per room per night. Hotel owners could also receive up to HKD4,000 (USD516) to HKD4,500 (USD580.5) per room per month in absence of in-house services like cleaning, which is agreeable for these times.

“I think it is feasible [for hotel owners] if the government pays this rate for the whole hotel without any services as transitional housing,” he added.