Citywide occupancy hit 91% in H1.
A sustained tourism recovery is doing wonders for Hong Kong's hotel sector as citywide occupancy rate rose by 400 bps to 91% in the first half of the year, according to real estate consultant CBRE.
The number of visitor arrivals rose by 10.1% YOY to 30.61 million in H1 led by a surge in Mainland Chinese tourists.
Strong tourism figures has boosted Hong Kong's key hotel metrics with Room Nights Sold rising by 7.89% YoY whilst Room Nights Available (RNA) inched up by 3.71% YoY. Hotels also enjoyed higher profitability as RevPAR clocked in double-digit growth with High Tariff A hotels recording growth of 10.7% YoY, High Tariff B 15.5% YoY and Medium Tariff 19% YoY.
Sustained government support is also positioning the hotel sector for long-term growth as the administration doubles down on implementing its development blueprint for the tourism industry. The Travel Industry Bill, for one, which aims to upgrade the service quality of the local tourism sector is expected to be passed by the Legislative Council this year.
The Hong Kong Tourism Board also organised the first Meetings, Incentives, Conventions and Exhibitions (MICE) mission to Indonesia and Thailand in May to capitalise on the booming tourism growth in Southeast Asia. MICE visitor arrivals in Hong Kong inched up 2% YoY in first half of the year.
Despite getting a boost from higher tourist arrivals, the hotel market could face heightened risks over the depreciation of the RMB against the greenback, according to CBRE, which would make it more expensive for Chinese visitors to visit Hong Kong.
“Other concerns centre around the current decline in short haul visitors, with Hong Kong facing strong competition from Taiwan, Korea and Japan, and the overreliance upon visitors from the mainland,” the firm added.
Photo from Mandarin Oriental Hotel Group - Mandarin Oriental Hotel Group, CC BY-SA 3.0
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