Hong Kong average room rates surpass pre-Covid period in 2019: CBRE
The hotel market produced HK$ 29.2 million in profits in 2023, on par with 2019 numbers. According to the Hong Kong Tourism Board (HKTB), typical daily rates of HK$ 1,444 in January 2024 were 9% higher than in January 2019, and overall RevPAR (earnings per available bedroom) was 1% higher than in the exact same duration in 2018.
Incoming arrivals boosted to approximately 34 million, with mainland Chinese travelers representing over 79% of all arrivals in 2023. Over 1.46 million visitor arrivals were recorded during the Lunar New Year vacations in February 2024, of which Chinese composed 1.25 million (85.6%). The numbers have surpassed the levels documented over the very same time frame in 2018.
Operating efficiency for the luxury and high end sections in Hong Kong is expected to improve in 2024, with these investments having seen reasonably slower rate appraisal matched up to different tier 1 industry in the Asia Pacific location.
The Hong Kong Hotels Association (HKHA) disclosed standard room tenancy figures of 93.4% and average room prices of HK$ 1,715 ($295.50), the two of which are at or over the levels measured for the very same holiday time frame in 2019, states a CBRE report on the Hong Kong hotel market update on March 26.
HKTB expects a full resurrection of international tourist by the end of 2025, fuelled by a continued arrival of mainland Chinese tourists.
While hotels and resort operations have actually boosted markedly over the past one year, the financial investment market remains difficult. “Assumptions are that borrowing expenses will start to decline in mid-2024 in conjunction with the Federal Reserve,” indicates the report. Therefore, it is expected to market investment activity. However, CBRE notes that a negative take and skepticism over when these rates will begin to change can limit the chances of a strong uptick in investment volume.
“With a significant margin still existing in between historical and current overnight viewers numbers, CBRE is confident that there will certainly be further operational development in Hong Kong SAR in 2024, driven by a recuperation in tenancy in well-managed assets,” claims the statement.
According to CBRE, exclusive investors are going to remain to drive procurements in 2024, with a value-add and opportunistic approach as their key emphasis. Co-living, university student room, and serviced residence owners are expected to go on expanding their footprint by capitalising on the overall lack of such estates in the living field and the need provided by the Top Talent Pass Scheme (TTPS).
The recuperation in accommodation functionality has been driven by the statement of global visitors, mainly mainland Chinese tourists, that account for over 79% of all incoming arrivings over the past one year, claims CBRE.
