Demand continues to grow steadily in the first quarter

• As of YTD February 2025, Hong Kong welcomed 8.4 million international tourists, representing a 9.4% increase Y-o-Y. Mainland China remains the primary source market, accounting for 77% of visitors.
• In the first two months of the year, Hong Kong hotels recorded further increases in RevPAR, driven by sustained occupancy growth.

Subdued new supply in Q1 2025, with more openings expected later in the year

• During the first quarter of 2025, no new hotel supply entered the Hong Kong market.
• For the remainder of the year several hotel openings are expected, bringing total new supply for 2025 to 1,589 rooms.

The investment market shows limited activity

• Hong Kong recorded lukewarm activity in Q1 2025 on the hotel investment front, with two hotel deals completed totalling HKD 0.9 billion.
• The bid-ask spread is gradually narrowing, which is expected to facilitate more deals later in the year.

Outlook: Hong Kong’s tourism sector continues its recovery trajectory

• The city’s first quarter benefited from the Lunar New Year celebrations and various international events, including the famed Hong Kong Sevens, attracting both domestic and international visitors.
• With this positive momentum, lodging and tourism are expected to see continued improvements throughout 2025, as previously anticipated.