Hong Kong average room rates surpass pre-Covid period in 2019: CBRE
The recovery in accommodation performance has been pushed by the return of international travellers, primarily mainland Chinese visitors, who account for over 79% of all incoming arrivings over the past 12 months, states CBRE.
The hotel market created HK$ 29.2 million in earnings in 2023, on par with 2019 figures. According to the Hong Kong Tourism Board (HKTB), typical daily rates of HK$ 1,444 in January 2024 were 9% more than in January 2019, and overall RevPAR (profits per available room) was 1% higher than in the exact same period in 2018.
While hotel and resort operations have boosted substantially over the past twelve month, the financial investment market continues to be difficult. “Presumptions are that loaning prices will certainly start to decline in mid-2024 in tandem with the Federal Reserve,” indicates the report. Hence, it is expected to market financial investment activity. However, CBRE notes that a negative carry and unpredictability over when these rates are going to begin to move might limit the possibilities of a solid uptick in venture volume.
Inbound arrivals enhanced to around 34 million, with mainland Chinese visitors representing over 79% of all arrivals in 2023. Over 1.46 million vacationer landings were filed throughout the Lunar New Year holidays in February 2024, of which Chinese comprised 1.25 million (85.6%). The figures have actually surpassed the degrees logged over the exact same period in 2018.
HKTB anticipates a full improvement of international tourist by the end of 2025, fuelled by a continued arrival of mainland Chinese tourists.
Managing efficiency for the deluxe and high end sectors in Hong Kong is expected to improve in 2024, with these assets having seen reasonably slower cost appreciation compared to other tier 1 industry in the Asia Pacific area.
“With a considerable margin still standing between historical and existing over night visitor numbers, CBRE is confident that there will be more functional growth in Hong Kong SAR in 2024, driven by a rehabilitation in tenancy in well-managed assets,” states the report.
The Hong Kong Hotels Association (HKHA) reported average room occupancy levels of 93.4% and average room rates of HK$ 1,715 ($295.50), each of which are in or over the amounts measured for the same holiday season period in 2019, states a CBRE report on the Hong Kong hotel market update on March 26.
According to CBRE, private investors are going to continue to steer acquisitions in 2024, with a value-add and opportunistic strategy as their main concentration. Co-living, college student lodging, and serviced home operators are expected to go on expanding their presence by capitalising on the general lack of such properties in the living industry and the demand presented by the Top Talent Pass Scheme (TTPS).