Faster recovery awaits Hong Kong’s high-end hotels

JLL expects the sector’s transaction activity to reach US$1b by Q423.

Hong Kong’s high-end hotels will likely rebound and achieve faster growth this year, according to JLL.

Based on the report, hotel transaction activity will pick up in Q4 and will likely reach US$1b. 

JLL also expects the Revenue Per Available Room (RevPAR) of high-end hotels to rebound to pre-Covid levels in 2024.

In February 2023, the RevPAR of High Tariff A hotels jumped 161% YoY to $1,257, which JLL said is the strongest growth amongst all hotel segments. 

"We expect RevPAR to rebound to 2018 levels during 2024, driven by the rebound of tourism with the lifting of border restrictions to inbound travellers. We expect pent-up demand from mainland China to be significant and on average higher spending than pre-pandemic, favouring the full-service and luxury segments. This rate-led recovery is in line with other Asian gateway markets which have reopened,” Xander Nijnens, head of Hotel Advisory and Asset Management at JLL in Asia Pacific, said.

Unlike high-end hotels, budget and midscale hotels will take longer to recover, given that they have a “large proportion of long-stay guests.”

“They would have to wait for those leases to expire before being able to welcome short-stay guests…Similarly, it is going to take a prolonged period for inbound airlift into Hong Kong to be fully reinstated, and this will put a brake on the recovery,” JLL said.