Hong Kong average room rates surpass pre-Covid period in 2019: CBRE
The recovery in hotel operation has actually been driven by the statement of global travellers, primarily mainland Chinese tourists, that represent over 79% of all inbound arrivings over the past twelve month, states CBRE.
While hotel operations have enhanced significantly over the past 12 months, the investment market continues to be tough. “Assumptions are that borrowing costs will certainly start to decrease in mid-2024 in conjunction with the Federal Reserve,” indicates the report. For this reason, it is anticipated to market financial investment activity. However, CBRE notes that an adverse carry and uncertainty over when these rates are going to begin to change could restrict the possibilities of a strong uptick in investment quantity.
Incoming arrivals boosted to approximately 34 million, with mainland Chinese visitors making up over 79% of all arrivals in 2023. Over 1.46 million tourist landings were filed during the Lunar New Year holidays in February 2024, of which Chinese made up 1.25 million (85.6%). The figures have gone beyond the degrees recorded over the same time frame in 2018.
“With a considerable margin still standing between historical and current over night guest numbers, CBRE is optimistic that there will be more functional development in Hong Kong SAR in 2024, pushed by a recovery in tenancy in well-managed assets,” says the statement.
HKTB expects a complete improvement of international travel by the end of 2025, fuelled by a continued arrival of mainland Chinese visitors.
The Hong Kong Hotels Association (HKHA) documented common room occupancy rates of 93.4% and regular room prices of HK$ 1,715 ($295.50), both of which are with or above the amounts measured for the similar holiday season time period in 2019, says a CBRE report on the Hong Kong hotel market news on March 26.
The hotel market created HK$ 29.2 million in earnings in 2023, on par with 2019 numbers. According to the Hong Kong Tourism Board (HKTB), typical daily levels of HK$ 1,444 in January 2024 were 9% more than in January 2019, and overall RevPAR (profits per readily available room) was 1% higher than in the very same period in 2018.
According to CBRE, exclusive investors will remain to generate purchases in 2024, with a value-add and opportunistic method as their key focus. Co-living, college student lodging, and serviced residence owners are projected to continue increasing their footprint by capitalising on the total scarcity of such buildings in the living field and the interest offered by the Top Talent Pass Scheme (TTPS).
Operating performance for the luxury and upscale sectors in Hong Kong is assumed to enhance in 2024, with these assets having actually observed reasonably slower rate appreciation matched up to various tier 1 markets in the Asia Pacific area.