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Hong Kong luxury hotel rates rise, but investors face patience test

Average daily rates for luxury and upper upscale hotels were 1.3% higher year over year in the first half of the year, even as the wider market remained slightly lower.

Reported · Written up by our desk · Industry

Signs of recovery are showing up in Hong Kong’s real estate sector, with luxury hotels standing out as a key indicator for whether demand growth can sustain, according to data cited by SCMP Economy.

STR, part of CoStar Group, found that average daily rates for luxury and upper upscale hotels in the first half of this year were 1.3% higher than in the corresponding period in 2018. For the overall market, average daily rates were 1.3% lower over the same period.

SCMP Economy also notes that STR identified three months, January, February, and May, when rates were actually higher. STR regional vice-president for Asia-Pacific Jesper Palmqvist said the issue for investors is whether they will keep watching long enough, and whether they have the expertise to pursue opportunities that may require repositioning or even repurposing hotels.

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