Two notable new hotels to watch out for in Hong Kong this year
These two projects will bring a total of 542 new rooms to the market.
According to JLL, as at YTD March 2021, overall visitor arrivals contracted by 99.5% y-o-y as a result of the ongoing COVID-19 pandemic. International visitors arrivals (excluding mainland China) in February summed up to a minimal total of 4,941. Mainland China, Hong Kong’s top source market, declined by 99.6% y-o-y as at YTD March 2021, totalling 11,597 arrivals.
JLL says hotel room supply growth will remain steady over the medium term.
Here’s more from JLL:
The Sheraton Tung Chung and Four Points Tung Chung were the only hotels that opened in 1Q21, totalling 1,234 rooms. Some notable future openings in 2021 include The Silveri, MGallery by Sofitel (200 rooms) and the extension of Sky City Marriott (342 rooms).
By the end of 2021, we anticipate that 3,600 hotel rooms will be added to the market, with new openings spread across Hong Kong Island and Kowloon. Wan Chai, the Airport and Tsim Sha Tsui areas are particular focal points for supply in the next few years. In light of the impact of COVID-19, we expect the future supply pipeline to potentially be delayed.
Trading performance continues to decline due to COVID-19
As at YTD March 2021, RevPAR (revenue per available room) of luxury hotels in Hong Kong was down by 6.8% y-o-y to HKD 526, mainly due to the 15.6% y-o-y decline in average daily rate (ADR). By contrast, occupancy grew by 10.4 percentage points from same time last year, reaching 21.4%.
The first quarter of 2021 continued to see a decline in marketwide hotel trading performance due to the continued impact of COVID-19 that began in January 2020. However, luxury hotel trading performance witnessed a notable increase of 145.3% in the month of March, against the 2020 level, displaying positive market improvements.
Outlook: Declines expected to slow but continue in 2H21
Amidst uncertainties resulting from COVID-19 and continued political tension, we expect Hong Kong’s luxury hotel trading performance downturn to continue for the foreseeable future, albeit at a subdued level.
Moving forward, we expect that upon the safe containment of COVID-19, hotel performance will start a recovery phase for a period of up to two years before returning to positive growth.
Note: Hong Kong Hotels refers to Hong Kong's luxury hotel market.