Hotel industry in Hong Kong - statistics & facts
Hong Kong is one of the most visited cities in the world and an important tourist hub in Asia. Two hotels in Hong Kong made it to the top five of the World’s 50 Best Hotels Award of 2024: Rosewood Hong Kong came in at number three and the Upper House was ranked fifth globally. This international recognition is proof of Hong Kong’s exceptional hospitality service and world-class facilities.
In early 2023, mainland China reopened its borders after three years of COVID-19 related restrictions. With this as a backdrop, the inbound tourism in Hong Kong has finally started showing the signs of recovery. However, the numbers of incoming visitors remain still far below the pre-pandemic level and do not translate into a strong performance for the hotel sector. Staff shortages, increase in operational costs, and local weekend accommodation demand dropping proved difficult for many hoteliers in 2023 and 2024.
Hotel sector in Hong Kong expected an easier return to pre-pandemic levels, however, the market has shifted, forcing hotel operators to adjust their strategy and diversify their revenue sources. Given the continuous, albeit slow, recovery of visitor numbers and several new tourist attractions, in tandem with an increased effort to carefully curate and market packages to offer guests unique experiences, the sector is expected to bounce back.
Hotel supply
Hong Kong boasted over 1,600 hotels and guesthouses at the end of 2023. More than 15 new hotels opened since 2022, including Le Meridien Hong Kong, Hotel Ease Access Lao Chi Ko, and Regent Hong Kong. Approximately 12 percent of all the hotels in the city are the so-called “high tariff A” establishments – upscale and luxury travel accommodation. This hotel category saw the biggest increase in average room rates in 2023, slightly exceeding 300 U.S. dollars per room per night. At the pure luxury end, rates were significantly higher.Shifting patterns in tourism
Over the last two decades, Hong Kong has benefited greatly from an increasing stream of visitors coming from mainland China, making up more than three quarters of total arrivals in recent years. They are also the ones bringing in more money compared to other tourists into the city.In early 2023, mainland China reopened its borders after three years of COVID-19 related restrictions. With this as a backdrop, the inbound tourism in Hong Kong has finally started showing the signs of recovery. However, the numbers of incoming visitors remain still far below the pre-pandemic level and do not translate into a strong performance for the hotel sector. Staff shortages, increase in operational costs, and local weekend accommodation demand dropping proved difficult for many hoteliers in 2023 and 2024.
Investment sentiment
Prevailing economic uncertainties and the high interest rates weakened the investment sentiment in Hong Kong’s hotel sector in 2023. That year, hotel transactions accounted for only 17 percent of all commercial property transactions in the city. The continued trend on the investment front is the acquisition of under-performing, mostly mid-range hotels for conversion to student accommodation which serves as an offset to a strong demand and low supply of non-local student residences in the city. The number of foreign students in Hong Kong has been steadily increasing thus unleashing asset repurposing potential in the struggling hotel industry.Hotel sector in Hong Kong expected an easier return to pre-pandemic levels, however, the market has shifted, forcing hotel operators to adjust their strategy and diversify their revenue sources. Given the continuous, albeit slow, recovery of visitor numbers and several new tourist attractions, in tandem with an increased effort to carefully curate and market packages to offer guests unique experiences, the sector is expected to bounce back.
