Hong Kong average room rates surpass pre-Covid period in 2019: CBRE

Incoming arrivals increased to about 34 million, with mainland Chinese visitors accounting for over 79% of all arrivals in 2023. Over 1.46 million visitor arrivals were filed during the Lunar New Year holidays in February 2024, of which Chinese made up 1.25 million (85.6%). The figures have surpassed the degrees recorded over the very same period in 2018.

The Hong Kong Hotels Association (HKHA) disclosed standard room tenancy figures of 93.4% and average room prices of HK$ 1,715 ($295.50), each of which are at or above the amounts assessed for the very same holiday time frame in 2019, says a CBRE record on the Hong Kong hotel market news on March 26.

While hotel business have actually enhanced significantly over the past year, the investment market stays challenging. “Assumptions are that loaning costs will start to decrease in mid-2024 in conjunction with the Federal Reserve,” mentions the statement. Therefore, it is anticipated to advertise financial investment activity. Nonetheless, CBRE notes that an unfavorable carry and skepticism over when these rates are going to begin to move could restrain the probabilities of a solid uptick in venture volume.

Operating performance for the luxury and high end segments in Hong Kong is anticipated to improve in 2024, with these assets having seen fairly slower rate appraisal matched up to various rate 1 markets in the Asia Pacific area.

The recovery in accommodation performance has been driven by the statement of international visitors, mainly mainland Chinese vacationers, who account for over 79% of all incoming arrivings over the past twelve month, states CBRE.

“With a substantial margin still standing between historical and existing over night guest numbers, CBRE is optimistic that there will certainly be more functional development in Hong Kong SAR in 2024, driven by a rehabilitation in tenancy in well-managed properties,” says the statement.

HKTB expects a full improvement of global tourism by the end of 2025, sustained by an ongoing arrival of mainland Chinese visitors.

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The accommodation sector generated HK$ 29.2 million in revenue in 2023, on the same level with 2019 rates. According to the Hong Kong Tourism Board (HKTB), average daily levels of HK$ 1,444 in January 2024 were 9% higher than in January 2019, and overall RevPAR (income per readily available bedroom) was 1% more than in the exact same period in 2018.

According to CBRE, exclusive financiers are going to remain to steer acquisitions in 2024, with a value-add and opportunistic approach as their key focus. Co-living, college student lodging, and serviced house operators are expected to carry on broadening their footprint by capitalising on the overall lack of such buildings in the living field and the interest provided by the Top Talent Pass Scheme (TTPS).

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