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

While hotels and resort business have actually improved substantially over the past one year, the investment market continues to be tough. “Presumptions are that loaning prices will begin to decrease in mid-2024 in conjunction with the Federal Reserve,” indicates the report. For this reason, it is expected to promote financial investment activity. Nonetheless, CBRE notes that a negative hold and uncertainty over when these prices are going to begin to change can limit the probabilities of a solid uptick in venture number.

The upturn in hotel operation has been pushed by the return of worldwide travellers, primarily mainland Chinese tourists, that represent over 79% of all inbound landings over the past 12 months, claims CBRE.

“With a considerable margin still standing between historical and current overnight visitor numbers, CBRE is positive that there will be additional operational growth in Hong Kong SAR in 2024, pushed by a recovery in occupancy in well-managed assets,” says the statement.

HKTB expects a full recovery of global travel by the end of 2025, fuelled by an ongoing increase of mainland Chinese visitors.

Inbound arrivals enhanced to around 34 million, with mainland Chinese visitors accounting for over 79% of all arrivals in 2023. Over 1.46 million traveler arrivals were filed throughout the Lunar New Year vacations in February 2024, of which Chinese made up 1.25 million (85.6%). The numbers have actually surpassed the levels recorded over the exact same period of time in 2018.

The Hong Kong Hotels Association (HKHA) documented standard room occupancy figures of 93.4% and average room rates of HK$ 1,715 ($295.50), both of that are with or above the amounts measured for the similar holiday time frame in 2019, states a CBRE record on the Hong Kong hotel market news on March 26.

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The lodging sector generated HK$ 29.2 million in revenue in 2023, on the same level with 2019 rates. According to the Hong Kong Tourism Board (HKTB), average everyday levels of HK$ 1,444 in January 2024 were 9% more than in January 2019, and overall RevPAR (profits per offered bedroom) was 1% greater than in the same period in 2018.

Running performance for the high-end and upscale sectors in Hong Kong is assumed to enhance in 2024, with these properties having actually seen relatively slower rate appraisal compared to various rate 1 industry in the Asia Pacific area.

According to CBRE, private financiers will continue to generate procurements in 2024, with a value-add and opportunistic approach as their main focus. Co-living, university student room, and serviced home operators are projected to carry on broadening their presence by capitalising on the general shortage of such buildings in the living market and the demand provided by the Top Talent Pass Scheme (TTPS).

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