Lai Fun: It is expected that the occupancy rate and average room rate of Hong Kong hotels will continue to rise in the short term. Luxury hotels outperform the market.

Recently, Savills released the "Hong Kong Hotel Report", pointing out that due to the gradual increase in the number of Hong Kong travelers this year and the shortage of supply of five-star hotels, it is expected that the occupancy rate and average room price of Hong Kong hotels will continue to rise in the short term. With limited hotel supply coming soon, market demand should be able to absorb the new supply, especially in major tourist areas. It is expected that Hong Kong Grade A luxury hotels will continue to outperform the market. As a result, revenue per available room (RevPAR) is expected to continue to rise in 2024, surpassing 2019 and possibly rebounding to the level of 2018. Looking ahead, Savills stated that they expect the Hong Kong hotel industry to continue to recover, with supply and demand dynamics favoring the market. Improvements in inbound tourism will drive market momentum, including leisure and incentive travel, meetings, incentives, conferences, and exhibitions (MICE) visitors. In the hotel investment market, the performance of Grade A luxury hotels and Grade B luxury hotels continues to outperform mid-priced hotels, putting pressure on the asset value of mid-priced hotels and making them a target for investors to convert into student accommodation. Recent statistical data shows that US inflation has significantly slowed, the labor market has cooled, and interest rates should be nearing their peak, with the Federal Reserve also indicating three rate cuts this year. Savills predicts that there will be more mid-priced hotel transactions later this year, and the trend of hotels transitioning business models will continue to meet the demand from new immigrants.