HK hotel occupancy soars 72% in first two months
The reopening of borders and lifting all quarantine controls drove the increase.
Occupancy in Hong Kong hotels grew 72% in the first two months of 2023, whilst the average daily rate (ADR) increased to $1,103 per night. The hotel's revenue per available room surged by 49% to $797 per night year-over-year.
Savills said in their Market in Minutes research that the full reopening of the borders with Mainland China and lifting all quarantine controls and social distancing measures for all incoming tourists drove the rebound of investments for the city's hospitality sector.
Meanwhile, Savills said the 3.5% 3-month Hong Kong Interbank Offered Rate (HIBOR) would reach the cost of funds for property investors to 5%-6%, whilst a 0.25% to 0.5% increase rate to the US Fed for the rest of the year will escalate the cost of funds that would become an obstacle for them making investment decisions amidst continuing improvement for business and market sentiment.
The firm also said that retailers in cosmetics and drug stores are actively seeking expansion plans in Hong Kong's tourist areas after 4.4 million visitors, including tourists from Mainland China, returned to the city.
Savills then said that prices in Hong Kong's Grade A offices might continue to drift in the near term, despite a reviving demand from local end users and old families and new sources of demand from the Mainland, particularly from the Greater Bay Area after the border reopened.