Hotel spending to hit $37.5b in 2026 on mainland Chinese demand

Overnight arrivals from Japan and South Korea still sit about 39% under 2018 levels.

Total hotel spending in Hong Kong is forecast to reach $37.5b in 2026 as the market continues to recover, underpinned by stronger spending by mainland Chinese visitors.

The forecast is about 90% of the peak recorded in 2018, according to Knight Frank’s Hong Kong Hotel Report, published in September 2026.

Aggregate hotel expenditure has continued to grow, supported by increases in visitor volumes and the stronger contribution from mainland China.

The recovery remains uneven across visitor markets, with overnight arrivals from Japan and South Korea still about 39% below 2018 levels.

Per-capita hotel spending fell in 2025 across most markets, except for mainland China and North America.

The report highlighted business travel as a key gap in the recovery, with business visitor arrivals in the first half of 2026 still 43% below 2018 levels, leaving room for further recovery.

Hotel performance has varied significantly by segment. High-tariff-A hotels recorded a record revenue per available room (RevPAR) of $1,883 in the first half of 2026, surpassing 2018 levels.

Medium-tariff hotels posted higher occupancy but saw room rates decline, resulting in the largest drop in RevPAR among the hotel segments.

The rapid growth of young professionals and non-local students in Hong Kong over the past four years has increased interest in the conversion of selected hotel assets into co-living and student accommodation, Knight Frank said.

Antonio Wu, head of capital markets at Knight Frank, said rising demand from non-local students was also creating opportunities for hotel owners to convert selected properties into co-living or student accommodation.

“High tariff-B and medium tariff hotels with smaller unit sizes, lower room counts and sufficient communal facilities are considered well-suited for such conversion,” he added.

Student accommodation has emerged as a significant investment theme, with several hotel transactions in 2026 earmarked for conversion, the report showed.