Demand continued to grow in the fourth quarter

• As of YTD November 2024, Hong Kong welcomed 40 million international tourists, representing a 135% increase y-o-y. The primary source market continues to be Mainland China, accounting for 80% of the market share.
• In the first eleven months of the year, hotels in Hong Kong recorded a notable increase in RevPAR, boosted by significant rise in occupancy and a marginal increase in ADR.

Multiple openings were completed by year-end

• During the fourth quarter of 2024, new hotel supply included several properties entering the Hong Kong market, with a total of 2,797 new rooms added to the market.
• Notable openings included the 1,000-key Hopewell Hotel located in Wan Chai and the 373-key Dorsett Kai Tak located in Hung Hom.

The investment market is stabilising as the bid-ask spread tightens

• Two hotel deals were completed in Q4 2024: Twenty One Withfield Hotel for HKD 260 million, and The Unit – Davis for HKD 275 million.
• Owners likely held their assets while waiting for an opportunity for pricing to improve. However, owners under pressure may have considered a possible exit given the lack of short-term clarity on the recovery.

Outlook: Full recovery might be in sight

• Tourist arrivals continue to drive Hong Kong’s recovery. The city’s fourth quarter was marked by a successful festive season and year-end celebrations, attracting both domestic and international visitors.
• With positive momentum going into 2025, lodging and tourism are expected to see further improvements. Full recovery is now anticipated by mid-2025.