Jones Lang LaSalle Inc.'s Hotels & Hospitality Group unit is predicting that Hong Kong hotels will take pole position for revenue growth in the Asian region in 2018.
The property consultancy is citing strengthening visitor arrivals to the special administrative region as the main reason for hotel occupancy hitting record levels, leading to a resurgence in room rate increases for the city's almost 80,000 guest rooms. JLL said overnight visitor arrivals climbed 6.2% in the first half, contributing to Hong Kong's RevPAR jumping 13% year over year to HK$1,214.
The uptick in demand and comparatively weaker supply growth are expected to buoy such hotel revenue growth, with Hong Kong hotels likely to register more than 10% growth in RevPAR for full-year 2018, outpacing other major Asian markets, JLL forecasts. Despite the firmer demand, the compound annual growth rate of new hotels coming online is estimated to be 2.4% between 2018 and 2022, falling short of the 4.3% long-term annual growth rate recorded in the decade from 2007 to 2017.
Hotels & Hospitality Senior Vice President Corey Hamabata predicts that Hong Kong hotels will see "sustained growth in the market over the near and medium term," particularly as tourist arrivals will be aided by smoother transport links after the Hong Kong-Zhuhai-Macao Bridge and Guangzhou-Shenzhen-Hong Kong Express Rail Link are completed within 2018.
Hamabata added in the Oct. 8 report that the growth predictions for Hong Kong's hotel sector has drawn more domestic investors in, with some 17 hotel transactions worth a collective HK$15.72 billion taking place since 2017. The executive anticipates that hotel investment activity would be sustained at a strong level over the next year.