Hong Kong average room rates surpass pre-Covid period in 2019: CBRE
The recuperation in accommodation operation has actually been driven by the return of international tourists, mostly mainland Chinese tourists, that represent over 79% of all incoming arrivals over the past year, states CBRE.
Running efficiency for the high-end and high end segments in Hong Kong is assumed to improve in 2024, with these assets having actually seen reasonably slower cost appraisal compared to various rate 1 markets in the Asia Pacific area.
“With a considerable margin still standing between historical and existing overnight visitor numbers, CBRE is confident that there will certainly be additional operational growth in Hong Kong SAR in 2024, propelled by a rehabilitation in occupancy in well-managed investments,” claims the information.
The Hong Kong Hotels Association (HKHA) disclosed standard room tenancy figures of 93.4% and standard room prices of HK$ 1,715 ($295.50), the two of which are with or over the levels assessed for the similar vacation time frame in 2019, says a CBRE report on the Hong Kong hotel market update on March 26.
The lodging sector created HK$ 29.2 million in profits in 2023, on par with 2019 numbers. According to the Hong Kong Tourism Board (HKTB), normal day-to-day rates of HK$ 1,444 in January 2024 were 9% more than in January 2019, and overall RevPAR (income per offered room) was 1% higher than in the very same duration in 2018.
Incoming arrivals increased to approximately 34 million, with mainland Chinese guests representing over 79% of all arrivals in 2023. Over 1.46 million vacationer arrivings were documented during the Lunar New Year vacations in February 2024, of which Chinese made up 1.25 million (85.6%). The figures have actually surpassed the levels documented over the same period in 2018.
According to CBRE, exclusive capitalists will remain to generate purchases in 2024, with a value-add and opportunistic strategy as their main emphasis. Co-living, college student room, and serviced residence owners are projected to go on expanding their footprint by capitalising on the general scarcity of such real properties in the living industry and the need presented by the Top Talent Pass Scheme (TTPS).
HKTB expects a full resurrection of worldwide travel by the end of 2025, sustained by an ongoing arrival of mainland Chinese visitors.
While hotel and resort operations have boosted substantially over the past one year, the investment market stays difficult. “Presumptions are that borrowing expenses will certainly start to decline in mid-2024 in conjunction with the Federal Reserve,” indicates the statement. For this reason, it is assumed to promote investment activity. Nonetheless, CBRE notes that a negative take and uncertainty over when these rates will start to shift could restrain the possibilities of a solid uptick in investment quantity.
