Hong Kong average room rates surpass pre-Covid period in 2019: CBRE
The Hong Kong Hotels Association (HKHA) disclosed standard room tenancy rates of 93.4% and regular room rates of HK$ 1,715 ($295.50), both of which are with or over the levels measured for the same vacation time period in 2019, claims a CBRE report on the Hong Kong hotel market news on March 26.
The hotel market generated HK$ 29.2 million in profits in 2023, on the same level with 2019 rates. According to the Hong Kong Tourism Board (HKTB), average day-to-day levels of HK$ 1,444 in January 2024 were 9% higher than in January 2019, and overall RevPAR (revenue per offered room) was 1% greater than in the very same period in 2018.
“With a substantial margin still existing in between historical and latest overnight guest numbers, CBRE is confident that there will be additional operational growth in Hong Kong SAR in 2024, propelled by a recovery in tenancy in well-managed assets,” claims the statement.
Inbound arrivals enhanced to around 34 million, with mainland Chinese travelers representing over 79% of all arrivals in 2023. Over 1.46 million vacationer arrivals were recorded during the Lunar New Year vacations in February 2024, of which Chinese composed 1.25 million (85.6%). The figures have gone beyond the degrees logged over the exact same period in 2018.
Operating performance for the deluxe and upscale segments in Hong Kong is expected to improve in 2024, with these investments having seen relatively slower rate appraisal compared to other rate 1 markets in the Asia Pacific region.
HKTB anticipates a complete improvement of global tourist by the end of 2025, sustained by a continued influx of mainland Chinese travellers.
While hotels and resort operations have actually improved substantially over the past 12 months, the investment market remains challenging. “Expectations are that loaning prices will certainly begin to decline in mid-2024 in tandem with the Federal Reserve,” mentions the report. Therefore, it is assumed to promote investment event. Nonetheless, CBRE notes that an unfavorable carry and skepticism over when these rates are going to begin to shift might restrict the possibilities of a strong uptick in investment quantity.
According to CBRE, exclusive capitalists are going to remain to drive purchases in 2024, with a value-add and opportunistic strategy as their main focus. Co-living, student accommodation, and serviced house owners are projected to continue increasing their presence by capitalising on the total lack of such real properties in the living industry and the demand offered by the Top Talent Pass Scheme (TTPS).
The upturn in hotels and resort functionality has actually been driven by the return of international visitors, primarily mainland Chinese tourists, who account for over 79% of all inbound arrivings over the past year, states CBRE.
