Hong Kong luxury hotels show signs of recovery outpacing 2018 levels

Signs of recovery in Hong Kong’s real estate industry are becoming more apparent, so much so that key indicators in parts of the sector are experiencing some of the fastest growth rates in the Asia-Pacific.

This makes the performance of its luxury hotels all the more impressive. According to data from STR, part of CoStar Group, average daily rates for luxury and upper upscale hotels in the first half of this year were 1.3 per cent higher than in the corresponding period in 2018. For the market as a whole, rates were just 1.3 per cent lower. “There were three months – January, February and May – when rates were actually higher,” said Jesper Palmqvist, regional vice-president for Asia-Pacific at STR.

The question is whether investors have the patience to keep watching and, if not, whether they have the expertise to exploit opportunities that involve repositioning and even repurposing hotels.