Visitor arrivals and hotel performance strengthen

• As of YTD September 2025, Hong Kong welcomed 33 million international visitors, marking a 12.4% y-o-y increase. Mainland China remains the dominant source market, representing 76.9% of total arrivals. Notably, emerging markets such as GCC countries have demonstrated significant growth momentum, with visitor numbers surging 76.9% compared to the same period last year.
• In the first nine months of 2025, Hong Kong hotels recorded a 10.4% increase in RevPAR. This notable improvement was driven by strengthened occupancy rates, which rose 8.4 ppts y-o-y.

Selective new hotel openings

• During the third quarter of 2025, two new hotels entered the Hong Kong market: the 274-room Motto by Hilton, which opened following a comprehensive renovation and rebranding, and the 492-room Kimpton Tsim Sha Tsui Hong Kong. Both properties represent new brands making their debut in Hong Kong.
• Several additional hotel openings are anticipated for the remainder of 2025, contributing a total of 823 rooms to the market. All properties are expected to be located in the Kowloon area and positioned within the limited-service segment. Supply for 2026 remains subdued, with the notable opening expected to be Andaz Hong Kong in Central district.

Market repricing spurs hotel deal flow

• Four hotel deals were completed in Q3 2025, totalling just below USD 100 million in transaction volume for the quarter.
• As the Hong Kong market undergoes a pricing adjustment, more transactions are expected to close before year-end 2025, leading to a total investment volume of USD 600 million and an average price per key of USD 245,000.

Outlook: Improving market dynamics and conversion opportunities fuel transaction activity

• Tourist arrivals remain on a steady trajectory to reach 50 million by year-end, with hotel performance continuing to improve as several properties are removed from inventory for co-living and student housing conversions, while the limited development pipeline further supports operational gains.
• Investment activity in the next 12 months is expected to intensify, driven by both improving performance fundamentals and attractive conversion opportunities, with additional large-scale events scheduled to further boost market dynamics.