HK protests take toll on Cathay, Peninsula
Cathay Pacific Airways Ltd and the owner of Hong Kong’s luxury Peninsula hotel became the latest companies to highlight the impact of recent protests on their business, as an escalating cycle of violence clouds the outlook for the city.
Protests in the Asian financial hub have intensified since mid-June, at times forcing banks, stores, shopping malls, restaurants and even government buildings to close as the demonstrations degenerated into violent clashes.
Hong Kong’s flagship airline, Cathay Pacific, said yesterday the protests reduced inbound passenger traffic in July and travelers were weighing on forward bookings, as it reported it swung to a half-year profit.
Thousands of protesters descended on the city’s airport in July, disrupting services. Protesters plan to rally at the airport again this weekend, potentially causing further disruptions after a strike on Monday saw more than 200 flights canceled.
The Hongkong and Shanghai Hotels Ltd, owner of the opulent Peninsula hotel in the bustling shopping district of Tsim Sha Tsui, said it too was worried about the impact of the protests on tourist arrivals as well as the broader economy.
Clement Kwok, CEO of the hotel group, said in an earnings statement yesterday that the group is concerned about the effect the situation may have on its results, especially given the proportion of its income which is earned in Hong Kong.
In June, Hong Kong-based cosmetic and health care products chain operator Bonjour Holdings Ltd issued a profit warning which it partly blamed on the protests.
Hong Kong retail sales, a key part of the city’s economy, felt a growing impact in June from the mass protests, falling 6.7 percent from a year earlier in the biggest decline since February.
With Hong Kong’s crucial travel industry suffering as tourists put off their visits, Australia became the latest country to issue a travel safety warning to its citizens.
Australians should “exercise a high degree of caution,” in Hong Kong, the notice said. It said there was a risk of violent confrontation and visitors should avoid large gatherings, especially at night and on weekends.
Ireland, Britain, and Japan have already issued Hong Kong travel warnings.