United Airlines Boeing 777-200 aircraft landing at London Heathrow International Airport in England, ... [+]
Ongoing tension between pro-democracy protesters and the Chinese-backed Hong Kong government are having an adverse affect on tourism to the region. According to The Wall Street Journal, arrivals into Hong Kong fell 40% from a year ago at this time. As a function of the drop off, hotel and air operators are slashing service and fares to the city.
Much of the bloodletting started late last month when it was clear that protesters were digging in. Globally, CNBC reported that airline bookings to Hong Kong have fallen 10% since the beginning of the unrest.
According to the South China Morning Post, Qantas, the flag carrier of Australia has already downgraded several of its aircraft operating on routes to Hong Kong, effectively cutting capacity to the city by 7% (Sydney’s airport, where Qantas is based, has also cut its earnings forecast). That same week, United suspended its nonstop flights between Chicago and Hong Kong because it couldn’t sell enough seats.
Cathay Pacific, Hong Kong’s home airline and member of the Oneworld Alliance, has been hit particularly hard. Earlier this month, Reuters reported that the airline was cutting flights after seeing an 11.3% drop in demand since the protests started. Earlier in August, that airline’s CEO was ousted for refusing to give up the names of employees that were participating in the protests.
Now, United Airlines is making further cuts. According to Aeronautics Online, the Chicago-based carrier is downgrading several of its aircraft flying to Hong Kong from Boeing 777-300ERs to 777-200ERs. The downgrade is aimed at reducing the number of empty seats flying across the Pacific.
American Airlines, the only other legacy U.S. carrier that flies direct to Hong Kong, has so far not made any capacity cuts to its routes.
For those still traveling to Hong Kong, the upside of the cuts is that prices have fallen precipitously. According to The Wall Street Journal, hotel prices have been slashed by as much as 70% while occupancy rates have dropped by one half.
Airline tickets have also fallen. Already, many Autumn rates from the west coast to Hong Kong have fallen into the $400 - $600 range. By comparison, many transcontinental flights from San Francisco or Los Angeles to New York often fall into that pricing bracket. If demand remains weak for Hong Kong travel, budget travelers may be in for a boon unforseen since the SARS epidemic and travel scare in 2003.
