The hotel industry in Hong Kong is set for an exciting year as operators welcome an influx of tourists while property owners bank on getting higher prices from buyers for their assets, according to some market experts.
Tourist arrivals, which jumped by a third to 44.5 million in 2024, are likely to sustain its momentum as the government rolls out programmes to boost its role in the economy. The city is also facing a shortfall in student beds, fuelling demand for hotel conversion projects into student accommodation.
The hospitality sector is expected to contribute 5 per cent to the city's economic growth by 2029 from 2.6 per cent in 2023, returning its significance last seen in 2018. In a blueprint unveiled in December, Hong Kong is seeking a HK$120 billion (US$15.4 billion) boost to the economy with 65,000 new jobs in the next five years.
The city saw notable hotel investments of HK$7.85 billion across eight transactions in 2024 that underlined the sector's resilience, according to Colliers, despite a sharp drop in total outlays for the year. Overall investments in 2024 declined 62 per cent to US$290.4 million in 2024, according to data compiled by JLL.
Still, Hong Kong's hotel segment is likely to face the same headwinds as in 2024, and could be pressured by China's economic struggles and heightened geopolitical tensions, according to Marina Bracciani, vice-president of hotel research at JLL's hospitality group in Asia-Pacific.
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