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

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 that are with or above the levels measured for the same holiday period in 2019, states a CBRE record on the Hong Kong hotel market news on March 26.

Incoming arrivals increased to approximately 34 million, with mainland Chinese guests representing over 79% of all arrivals in 2023. Over 1.46 million traveler arrivings were documented throughout the Lunar New Year vacations in February 2024, of which Chinese made up 1.25 million (85.6%). The numbers have exceeded the degrees documented over the very same period of time in 2018.

Running performance for the luxury and upscale sections in Hong Kong is expected to boost in 2024, with these investments having actually observed fairly slower rate appreciation matched up to various rate 1 markets in the Asia Pacific region.

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While hotels and resort business have actually improved markedly over the past one year, the financial investment market stays tough. “Presumptions are that borrowing expenses will start to decline in mid-2024 in conjunction with the Federal Reserve,” indicates the report. Thus, it is assumed to market investment activity. Nevertheless, CBRE notes that an adverse hold and unpredictability over when these rates will start to shift might restrict the possibilities of a strong uptick in investment number.

The recuperation in accommodation performance has been driven by the statement of global visitors, generally mainland Chinese visitors, who represent over 79% of all incoming arrivals over the past 12 months, states CBRE.

HKTB anticipates a complete resurrection of global tourist by the end of 2025, sustained by an ongoing influx of mainland Chinese travellers.

“With a substantial margin still existing in between historical and existing overnight guest numbers, CBRE is confident that there will certainly be additional operational growth in Hong Kong SAR in 2024, pushed by a recovery in tenancy in well-managed assets,” claims the information.

The hotel sector generated HK$ 29.2 million in revenue in 2023, on par with 2019 rates. According to the Hong Kong Tourism Board (HKTB), typical day-to-day rates of HK$ 1,444 in January 2024 were 9% more than in January 2019, and overall RevPAR (revenue per readily available bedroom) was 1% higher than in the same duration in 2018.

According to CBRE, private financiers will remain to generate acquisitions in 2024, with a value-add and opportunistic method as their key emphasis. Co-living, student lodging, and serviced residence operators are expected to go on increasing their presence by capitalising on the general lack of such buildings in the living market and the need presented by the Top Talent Pass Scheme (TTPS).

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