Hong Kong average room rates surpass pre-Covid period in 2019: CBRE
Running performance for the high-end and upscale segments in Hong Kong is assumed to improve in 2024, with these properties having observed reasonably slower cost appreciation contrasted to other tier 1 markets in the Asia Pacific location.
“With a significant margin still existing between historical and existing over night guest numbers, CBRE is positive that there will certainly be additional functional growth in Hong Kong SAR in 2024, propelled by a recovery in tenancy in well-managed properties,” states the report.
While hotel operations have actually boosted considerably over the past one year, the financial investment market remains difficult. “Assumptions are that borrowing expenses will begin to decrease in mid-2024 in tandem with the Federal Reserve,” mentions the report. Thus, it is anticipated to promote financial investment event. Nevertheless, CBRE notes that an adverse hold and skepticism over when these prices are going to start to change can restrain the possibilities of a strong uptick in venture number.
HKTB expects a complete recuperation of worldwide tourism by the end of 2025, sustained by a continuous increase of mainland Chinese tourists.
According to CBRE, private capitalists will remain to drive procurements in 2024, with a value-add and opportunistic strategy as their main emphasis. Co-living, student lodging, and serviced residence owners are expected to continue increasing their footprint by capitalising on the overall lack of such real properties in the living industry and the interest offered by the Top Talent Pass Scheme (TTPS).
Incoming arrivals boosted to approximately 34 million, with mainland Chinese guests making up over 79% of all arrivals in 2023. Over 1.46 million traveler arrivings were recorded throughout the Lunar New Year holidays in February 2024, of which Chinese comprised 1.25 million (85.6%). The figures have exceeded the degrees documented over the same time frame in 2018.
The hotel sector produced HK$ 29.2 million in profits in 2023, on par with 2019 figures. According to the Hong Kong Tourism Board (HKTB), normal daily levels of HK$ 1,444 in January 2024 were 9% more than in January 2019, and overall RevPAR (profits per offered room) was 1% greater than in the same period in 2018.
The recuperation in hotel functionality has actually been driven by the statement of worldwide visitors, generally mainland Chinese visitors, that make up over 79% of all incoming arrivals over the past 12 months, claims CBRE.
The Hong Kong Hotels Association (HKHA) documented standard room tenancy figures of 93.4% and standard room prices of HK$ 1,715 ($295.50), each of that are in or above the amounts assessed for the similar holiday season time frame in 2019, states a CBRE record on the Hong Kong hotel market news on March 26.
