Hong Kong average room rates surpass pre-Covid period in 2019: CBRE
The Hong Kong Hotels Association (HKHA) reported standard room occupancy rates of 93.4% and regular room prices of HK$ 1,715 ($295.50), each of which are with or over the degrees assessed for the very same holiday time period in 2019, claims a CBRE record on the Hong Kong hotel market update on March 26.
The recovery in accommodation functionality has actually been driven by the return of worldwide tourists, generally mainland Chinese tourists, that represent over 79% of all inbound landings over the past twelve month, says CBRE.
HKTB expects a complete improvement of global travel by the end of 2025, fuelled by a continued increase of mainland Chinese travellers.
While hotel and resort operations have enhanced markedly over the past twelve month, the financial investment market stays tough. “Expectations are that borrowing expenses will begin to decline in mid-2024 in tandem with the Federal Reserve,” indicates the report. Thus, it is anticipated to promote financial investment activity. However, CBRE notes that a negative carry and unpredictability over when these prices will begin to move can restrict the possibilities of a solid uptick in venture volume.
According to CBRE, private investors are going to continue to generate acquisitions in 2024, with a value-add and opportunistic approach as their main focus. Co-living, university student accommodation, and serviced residence operators are projected to carry on broadening their impact by capitalising on the general lack of such buildings in the living industry and the need offered by the Top Talent Pass Scheme (TTPS).
Incoming arrivals enhanced to around 34 million, with mainland Chinese guests representing over 79% of all arrivals in 2023. Over 1.46 million traveler arrivings were filed during the Lunar New Year holidays in February 2024, of which Chinese comprised 1.25 million (85.6%). The figures have actually exceeded the levels recorded over the very same period in 2018.
Managing performance for the luxury and high end sectors in Hong Kong is expected to improve in 2024, with these assets having actually seen fairly slower cost appraisal matched up to different tier 1 industry in the Asia Pacific location.
The hotel market generated HK$ 29.2 million in profits in 2023, on par with 2019 numbers. According to the Hong Kong Tourism Board (HKTB), typical day-to-day levels of HK$ 1,444 in January 2024 were 9% more than in January 2019, and overall RevPAR (income per offered bedroom) was 1% more than in the exact same duration in 2018.
“With a substantial margin still existing between historical and existing overnight visitor numbers, CBRE is positive that there will be additional functional development in Hong Kong SAR in 2024, propelled by a recuperation in tenancy in well-managed assets,” claims the report.
