Hotels in Hong Kong have a reputation for being expensive, even by Asian standards. But the good news is that things are changing for the better. The continuing Asian economic downturn – not to mention the SARS scare of spring 2003 – led many hotels to reduce rack rates and also offer big discounts in an effort to boost occupancy. Rates have now climbed back, almost to pre-SARS levels.

Most of the major hotels are located in Central, Wan Chai, Causeway Bay and Tsim Sha Tsui. Any of these districts will place you right at the heart of the action but bear in mind that Tsim Sha Tsui is currently a bit of a mess, with many pavements now being squeezed to half their original size thanks to hoardings that surround work on a new underground train interchange. This work is scheduled to last till mid 2005. Clusters of luxury hotels can also be found on Admiralty’s Supreme Court Road, Central’s Chater Road and the Tsim Sha Tsui and Wan Chai harboursides. Here you will find opulent and impressive five-star landmarks such as the Peninsula (Salisbury Road, +85229202888, www.peninsula.com, HK$3,000-$4,900) and the Grand Hyatt (1 Harbour Road, Wan Chai, +85225881234, http://hongkong.hyatt.com, HK$1,490-$3,850), which are among the best hotels in the world.

After being virtually non-existent for years, the mid-range sector is growing. Hotels outside the main districts, such as Western, North Point and more northerly parts of Kowloon, offer similar standards to the central hotels for less money. Hong Kong is a small city with excellent and cheap public transport (or free shuttle buses) so the minor inconvenience can be balanced by the savings. Bargains can be had at the Garden View International House (1 MacDonnell Road, Mid-Levels, +85228773737, www.ywca.org.hk), close to SoHo, Hong Kong Park and the Botanical Gardens. Also well situated is the Harbour View International House (4 Harbour Road, Wan Chai, +85228020111, www.harbour.ymca.org.hk, HK$1,200-$1,750).

Down a notch are the guesthouses. These are mainly concentrated in Causeway Bay and Tsim Sha Tsui. The latter is famous for its guesthouses, which nestle cheek-by-jowl with some of the city’s flashiest hotels. Many backpackers end up in either Mirador Mansions or Chungking Mansions on Nathan Road. The rabbit-warren buildings house scores of guesthouses; some are good, some are gritty, but all offer prime location at a cheap price. Be sure to check out a place before you stay.

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