News release

Hong Kong hotel investment to grow 24% to USD1 billion in 2023

RevPAR of high-end hotels to fully rebound to pre-Covid levels in 2024

April 18, 2023

Yvonne Liu

Public Relations Director, Hong Kong and Macao
+852 2846 5264

HONG KONG, April 18, 2023 – Hong Kong's high-end hotels are expected to show faster recovery and its RevPAR is expected to rebound to 2018 levels next year, according to JLL's latest 2023: A Year of Opportunities for Hong Kong Hotels report. The firm also believes that hotel transaction activity will pick up in the last quarter of 2023 and reach USD1 billion.

Internationally branded hotels, particularly the ones in the upscale and luxury segments, benefiting from modern standards, global recognition and strong distribution channels, are expected to show faster recovery, as JLL observed in other key global cities across Asia upon reopening. RevPAR of High Tariff A hotels jumped by 161% y-o-y as of YTD February 2023 – the strongest growth amongst all hotel segments – reaching HKD 1,257, representing 67% of 2018 levels.

Xander Nijnens, Head of Hotel Advisory and Asset Management at JLL in Asia Pacific, said: "We expect RevPAR to rebound to 2018 levels during 2024. This will be driven by the rebound of tourism with the lifting of border restrictions to inbound travellers. We expect pent up demand from mainland China to be significant, and on average higher spending than pre-pandemic, favouring the full service and luxury segments. This rate led recovery is in line with other Asian gateway markets which have reopened.”

However, as some of the budget and midscale hotels have a large proportion of long-stay guests, they would have to wait for those leases to expire before being able to welcome short-stay guests. As such, it will take a longer period for this segment to recover. Similarly, it is going to take a prolonged period for inbound airlift into Hong Kong to be fully reinstated, and this will put a brake on the recovery.

Hong Kong has historically been a well sought-after hotel investment market, with an average hotel transaction volume of USD 1 billion between 2007 and 2022. However, hotel transactions dropped significantly to an average of USD 500 million during the pandemic between 2020 and 2022, but the improving hospitality sector is expected to attract investors back to the market.

Jonathan Law, Vice President of Investment Sales at JLL in Hong Kong and Asia Pacific, said: "The hotel capital market is expected to pick up towards the end of 2023, reaching USD1 billion for the full year. Investors will likely continue to acquire hotels with smaller rooms with conversion opportunities."

JLL expects visitors from mainland China will likely return strongly to Hong Kong, starting from the second quarter of 2023, boosted by significant pent-up demand and ease of access. Similarly, corporate and MICE travel from Asia and the rest of the world will continue its strong recovery this year.

At the end of 2022, Hong Kong counted 89,466 hotel rooms with the future supply expected to remain limited over the next four to five years despite an anticipated return of tourists. For the hotel operators, rising costs and labour retention issues are expected to be the primary headwinds for the hospitality industry in the city, and in the short term, the hotels may need to operate with a limited inventory due to the lack of manpower. In the meantime, the hotels are expected to be agile and adapt to visitation trends in terms of product offerings and hotel operations, which includes optimising sales and yielding strategies to last-minute bookings, especially from mainland Chinese visitors.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $20.9 billion, operations in over 80 countries and a global workforce of more than 103,000 as of December 31, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit