Hong Kong welcomes 150 new hotel rooms in Q2

High construction costs are expected to hinder new hotel supply.

In the second quarter of 2023, JLL data showed 150 new hotel rooms entering the Hong Kong market with the opening of Shama Hub Metro South in Wong Chuk Hang, located in the southern district of Hong Kong Island.

Similarly to other markets in the region, JLL said the prevailing challenges in the hotel industry, such as the high cost of financing and construction, are expected to continue hindering new hotel supply in Hong Kong. As a result, the growth of new hotel properties is likely to remain sluggish in the near future.

Here’s more from JLL:

As of YTD June 2023, luxury hotels’ revenue per available room (RevPAR) reached HKD 2,259, representing 189% growth y-o-y. RevPAR experienced a mere 2% increase compared with the previous quarter as rates and occupancy levels normalised.

Towards the end of the year, the hotel capital market in the city is projected to gain some momentum, driven mainly by sales of smaller hotels and disposals of distressed assets. Transaction volume in the city is anticipated to reach a total of USD 400 million for the year.

Outlook: Market ready to grow despite slow return in travel confidence

Despite Hong Kong’s recovery, the Hong Kong Tourism Board anticipates that the total number of visitors for the full year of 2023 will be approximately 26 million, which is still considerably lower than the record level seen in 2018.

Although it has taken longer than anticipated for Hong Kong to restore travellers’ confidence, the hotel market in the city is still expected to experience sustained growth, with a full recovery expected by the end of 2024.

Note: Hong Kong Hotels refers to Hong Kong's luxury hotel market.

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