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

The hotel market generated HK$ 29.2 million in profits in 2023, on the same level with 2019 rates. According to the Hong Kong Tourism Board (HKTB), normal daily rates of HK$ 1,444 in January 2024 were 9% greater than in January 2019, and overall RevPAR (profits per available bedroom) was 1% more than in the very same duration in 2018.

HKTB expects a full recuperation of global tourist by the end of 2025, sustained by an ongoing arrival of mainland Chinese tourists.

The Hong Kong Hotels Association (HKHA) documented common room occupancy rates of 93.4% and average room rates of HK$ 1,715 ($295.50), each of that are in or over the amounts assessed for the similar holiday season time period in 2019, claims a CBRE record on the Hong Kong hotel market news on March 26.

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The recovery in hotel functionality has been steered by the statement of international travellers, primarily mainland Chinese vacationers, that represent over 79% of all inbound landings over the past twelve month, claims CBRE.

“With a considerable margin still existing between historical and existing over night viewers numbers, CBRE is positive that there will be more operational development in Hong Kong SAR in 2024, pushed by a recuperation in tenancy in well-managed investments,” says the report.

Inbound arrivals raised to around 34 million, with mainland Chinese travelers accounting for over 79% of all arrivals in 2023. Over 1.46 million traveler landings were filed throughout the Lunar New Year holidays in February 2024, of which Chinese comprised 1.25 million (85.6%). The figures have surpassed the levels documented over the exact same time frame in 2018.

Managing performance for the luxury and upscale sections in Hong Kong is anticipated to improve in 2024, with these investments having actually observed fairly slower rate appreciation compared to various rate 1 markets in the Asia Pacific location.

According to CBRE, private financiers will continue to drive acquisitions in 2024, with a value-add and opportunistic method as their primary focus. Co-living, student room, and serviced residence owners are projected to go on increasing their presence by capitalising on the overall scarcity of such estates in the living field and the need presented by the Top Talent Pass Scheme (TTPS).

While hotel companies have actually enhanced markedly over the past 12 months, the investment market continues to be challenging. “Presumptions are that credit costs will begin to decrease in mid-2024 in conjunction with the Federal Reserve,” mentions the statement. Hence, it is anticipated to advertise financial investment event. However, CBRE notes that a negative take and uncertainty over when these prices will begin to change could restrain the chances of a strong uptick in investment number.

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