Hong Kong average room rates surpass pre-Covid period in 2019: CBRE
According to CBRE, exclusive investors will remain to generate procurements in 2024, with a value-add and opportunistic strategy as their key concentration. Co-living, university student lodging, and serviced residence owners are expected to go on expanding their footprint by capitalising on the total lack of such real properties in the living market and the need provided by the Top Talent Pass Scheme (TTPS).
“With a significant margin still standing between historical and current over night visitor numbers, CBRE is optimistic that there will certainly be more functional development in Hong Kong SAR in 2024, driven by a recovery in tenancy in well-managed assets,” claims the information.
The Hong Kong Hotels Association (HKHA) documented standard room tenancy figures of 93.4% and standard room rates of HK$ 1,715 ($295.50), the two of that are with or over the degrees measured for the similar vacation time period in 2019, states a CBRE record on the Hong Kong hotel market update on March 26.
While hotel and resort operations have boosted considerably over the past year, the investment market remains tough. “Expectations are that borrowing costs will certainly start to decline in mid-2024 in tandem with the Federal Reserve,” indicates the statement. Hence, it is assumed to promote investment event. Nonetheless, CBRE notes that an unfavorable carry and uncertainty over when these rates will start to move could restrain the probabilities of a solid uptick in investment number.
The recovery in hotel operation has been steered by the return of worldwide tourists, mainly mainland Chinese vacationers, who make up over 79% of all inbound arrivings over the past 12 months, states CBRE.
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HKTB anticipates a full resurrection of worldwide tourism by the end of 2025, fuelled by an ongoing increase of mainland Chinese tourists.
Managing efficiency for the deluxe and high end sectors in Hong Kong is anticipated to improve in 2024, with these assets having seen reasonably slower cost appraisal matched up to other tier 1 markets in the Asia Pacific area.
Inbound arrivals increased to around 34 million, with mainland Chinese visitors accounting for over 79% of all arrivals in 2023. Over 1.46 million vacationer landings were reported during the Lunar New Year holidays in February 2024, of which Chinese composed 1.25 million (85.6%). The figures have actually gone beyond the degrees documented over the same period in 2018.
The lodging industry generated HK$ 29.2 million in revenue in 2023, on par with 2019 rates. According to the Hong Kong Tourism Board (HKTB), average daily rates of HK$ 1,444 in January 2024 were 9% greater than in January 2019, and overall RevPAR (profits per available bedroom) was 1% greater than in the same duration in 2018.
