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

According to CBRE, private investors are going to remain to generate acquisitions in 2024, with a value-add and opportunistic approach as their primary emphasis. Co-living, college student room, and serviced home operators are expected to go on expanding their footprint by capitalising on the total lack of such buildings in the living market and the need provided by the Top Talent Pass Scheme (TTPS).

The upturn in accommodation operation has been driven by the statement of global travellers, generally mainland Chinese visitors, who account for over 79% of all inbound arrivings over the past one year, says CBRE.

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The Hong Kong Hotels Association (HKHA) reported average room tenancy levels of 93.4% and average room prices of HK$ 1,715 ($295.50), the two of that are with or above the levels measured for the very same holiday season time period in 2019, claims a CBRE report on the Hong Kong hotel market update on March 26.

The lodging industry created HK$ 29.2 million in profits in 2023, on the same level with 2019 numbers. 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 (earnings per available room) was 1% greater than in the very same duration in 2018.

“With a considerable margin still standing between historical and current over night guest numbers, CBRE is positive that there will certainly be further operational growth in Hong Kong SAR in 2024, driven by a recuperation in tenancy in well-managed investments,” claims the statement.

Incoming arrivals enhanced to around 34 million, with mainland Chinese visitors accounting for over 79% of all arrivals in 2023. Over 1.46 million tourist landings were recorded during the Lunar New Year holidays in February 2024, of which Chinese composed 1.25 million (85.6%). The figures have actually gone beyond the degrees logged over the exact same period of time in 2018.

HKTB anticipates a full recuperation of international tourist by the end of 2025, fuelled by an ongoing arrival of mainland Chinese travellers.

While hotel companies have boosted markedly over the past 12 months, the financial investment market continues to be difficult. “Presumptions are that credit costs will certainly start to decrease in mid-2024 in tandem with the Federal Reserve,” indicates the statement. Therefore, it is expected to promote investment activity. Nonetheless, CBRE notes that an adverse hold and skepticism over when these rates are going to begin to change could restrain the possibilities of a strong uptick in venture quantity.

Running performance for the luxury and high end segments in Hong Kong is anticipated to enhance in 2024, with these investments having observed relatively slower rate appraisal matched up to different tier 1 industry in the Asia Pacific location.

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