Hong Kong’s hotel capital market to hit USD1b in 2023

Full recovery is expected by next year.

Overall hotel supply in Hong Kong, according to JLL, is expected to remain relatively sluggish due to the current headwinds, including inflated construction costs and elevated interest rates.

In the first three months of 2023, 504 new hotel rooms entered the market as a result of the soft opening of the Regent, formerly known as Intercontinental Hong Kong, located in Tsim Sha Tsui.

Here’s more from JLL:

The hotel capital market in the city is expected to pick up towards the end of the year 2023, fuelled primarily by hotels with smaller key counts and assets from distressed companies, reaching USD 1.0 billion for the full year. 

Similarly, with the border reopening coupled with the current macroeconomic environment, we do not expect other significant transactions related to co-living and repurposing conversions.

Outlook: Initial tangible recovery expected, following 2Q23

While Hong Kong is slowly recovering, significant rebound travel is expected to start in 2Q23, following the Golden Week.

Although there may be some challenges and uncertainties in the short term, the hotel market in Hong Kong is poised for continued growth, and full recovery is expected by the end of 2024.

Note: Hong Kong Hotels refers to Hong Kong's luxury hotel market.