Mainland demand drives Hong Kong hotels

Mainland demand drives Hong Kong hotels

Hotel rates in Hong Kong are surging, driven by strong demand from mainland Chinese visitors, according to STR Global. Revenue per available room (revPAR) for the first nine months of 2011 jumped 28% year-on-year, following substantial improvements in average daily rate (ADR), as well as strong occupancy growth.

In the same period, data from the Hong Kong Tourism Board (HKTB) revealed that visitor arrivals to the city increased 16.2% to 30.4 million. Arrivals from mainland China however, jumped 23.6% to 20.4 million, representing 67.0% of total visitors. Among these, 13.3 million came under the Individual Visit Scheme, a 29.2% year-on-year increase.

“RevPAR performance in Hong Kong now exceeds the highs of 1997 when Hong Kong moved from being a UK colony to a Special Administrative Region of China,” said Elizabeth Randall, Managing Director of STR Global. “The role of Hong Kong as a gateway to China, its continued attraction as a stable international financial centre and the success of the Individual Visitor Scheme, coupled with the current weakness of the HK dollar to the renminbi in encouraging visitors from mainland China have all been part of this success story.”

Within Hong Kong, strong revPAR growth was reported by both Hong Kong Island (26.1%) and Kowloon (29.5%). Occupancies on Hong Kong Island, whilst slightly lower (82%) than those of Kowloon (82.6%), have grown significantly faster (4.5% compared to 1.4%). Conversely, ADR in Kowloon is lower (HK$1,706 – approximately US$139) than Hong Kong Island (HK$1,931) but has grown faster at 27.7% compared to 20.7%. The variance in ADR between Hong Kong Island and Kowloon reflects the greater focus on business and luxury travellers in the former and leisure travellers in mainly mid-tier hotels in the latter.

On a rolling 12-month basis, Hong Kong hotels are now recording performance levels last seen in 1997.

Mark Elliott
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Mark Elliott
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