London Daily

Focus on the big picture.
Tuesday, Sep 09, 2025

Hong Kong’s hotel sector is in free fall as violent protests keep tourists from the mainland, and elsewhere, away

Nicholas Spiro
Global real estate markets may be slowing, but Hong Kong’s hotel sector has gone into free fall. In a matter of months, the strong fundamentals of Hong Kong’s tourism industry have been dealt a massive blow. The hotel market is now a proxy for the perceived stability of Asia’s financial hub, and things don’t look good.

Global property markets have cooled this year. Leasing activity and transaction volumes have slowed as investors turn cautious and demand from occupiers weakens.

However, in Hong Kong’s hotel market, a modest decline in occupancy and room rates in the first half of the year has exploded into a full-blown crisis as the mass anti-government protests that erupted in June descend into violence.

The city’s tourism industry, a pillar of the economy, is experiencing its sharpest downturn since the Sars epidemic in 2003. A 5 per cent year-on-year drop in tourist arrivals in July rapidly accelerated to a 40 per cent plunge in August, the steepest decline since May 2003, according to data from Bloomberg.

What is more, the number of tour groups from the mainland – which usually account for almost 80 per cent of arrivals – plummeted 63 per cent year on year in August, and fell 90 per cent in the first 10 days of September.

At a time when the Asia-Pacific and Middle East are driving the growth in international tourism, a trend fuelled by Chinese outbound travel, Hong Kong has fallen dramatically out of favour. The city’s own government, which has been eager – too eager, in fact – to highlight the negative impact of the unrest on the economy, has acknowledged the scale of the damage.

In a blog post last week, Financial Secretary Paul Chan Mo-po said the protests had severely tarnished Hong Kong’s “image as a safe city and an international commercial, trade, aviation and financial hub”.

He was even more blunt about the consequences for the tourism industry, saying that “hotels in some locations had seen occupancy rates drop to about half, while room rates plunged 40 to 70 per cent”.

The speed and severity of the deterioration in the performance of Hong Kong’s hotel market is staggering. Last year, Hong Kong showed the strongest growth in revenue per available room, or “RevPAR” – one of the hotel industry’s main performance metrics – in the Asia-Pacific, according to data from London-based consultancy Whitebridge Hospitality.

He was even more blunt about the consequences for the tourism industry, saying that “hotels in some locations had seen occupancy rates drop to about half, while room rates plunged 40 to 70 per cent”.

The speed and severity of the deterioration in the performance of Hong Kong’s hotel market is staggering. Last year, Hong Kong showed the strongest growth in revenue per available room, or “RevPAR” – one of the hotel industry’s main performance metrics – in the Asia-Pacific, according to data from London-based consultancy Whitebridge Hospitality.

Indeed, even in the first half of this year, RevPAR was still growing in certain segments of Hong Kong’s hotel market, underpinned by a citywide occupancy rate of 90 per cent, more or less the level at which it has stood for the past few years, according to data from real estate firm CBRE.

Despite the escalation of the trade war and the continued weakness of China’s economy, Hong Kong was on track to welcome a record
number of visitors this year.

Nearly 35 million people visited the city in the first six months, a year-on-year increase of 14 per cent. Arrivals from the mainland stood at 27.6 million, representing a year-on-year rise of more than 16 per cent, with Chinese tourists driving the growth in overnight stays, data from CBRE shows.

Yet, in the space of a few months, these strong fundamentals have had the rug pulled out from under them.

The collapse in hotel bookings, which is mostly attributable to the steep fall in arrivals from the mainland, led to a 13 per cent year-on-year decline in RevPAR in July alone, data from CBRE shows. The drop in revenue is likely to have accelerated since then.

As reported in the Post last Friday, Sun Hung Kai Properties, Hong Kong’s biggest developer, has seen occupancy rates at its hotels plunge
by an average of 30 to 40 per cent since the mass protests began.

The city’s hotel industry is now a proxy for the perceived stability of Asia’s leading financial centre, with the number of mainland tourists – who fear they could be targeted by hard-core protesters – constituting a key gauge of the performance of the sector and the wider economy.

The stakes are high, particularly given the growing supply of new rooms this year and next. Last year, Hong Kong’s hotel sector recorded the second-highest “average daily rate” (another key performance metric) in the Asia-Pacific, after Singapore. In Greater China, Hong Kong boasted the highest number of overnight visitors, followed by Macau and Taipei.

The only question now is how much more damage is likely to be inflicted on Hong Kong’s hotel market. With the protests turning increasingly violent, and the acuteness of the social and economic problems that have contributed to the unrest becoming ever more apparent, the performance of the industry is likely to continue to deteriorate.

Global real estate markets may be slowing, but Hong Kong’s hotel sector has gone into free fall.



* Nicholas Spiro is a partner at Lauressa Advisory


Newsletter

Related Articles

0:00
0:00
Close
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
Generations Born After 1939 Unlikely to Reach Age One Hundred, New Study Finds
End to a four-year manhunt in New Zealand: the father who abducted his children to the forests was killed, the three siblings were found
Germany Suspends Debt Rules, Funnels €500 Billion Toward Military and Proxy War Strategy
EU Prepares for War
BMW Eyes Growth in China with New All‑Electric Neue Klasse Lineup
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
US Justice Department Launches Criminal Mortgage-Fraud Probe into Federal Reserve Governor Lisa Cook
Escalating Drug Trafficking and Violence in Latin America: A Growing Crisis
US and Taiwanese Defence Officials Held Secret Talks in Alaska
Report: Secret SEAL Team 6 Mission in North Korea Ordered by Trump in 2019 Ended in Failure
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Florida Murder Case: The Adelson Family, the Killing of Dan Markel, and the Trial of Donna Adelson
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Brand-New $1 Million Yacht Sinks Just Fifteen Minutes After Maiden Launch in Turkey
Here’s What the FBI Seized in John Bolton Raid — and the Legal Risks He Faces
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Queen Camilla’s Teenage Courage: Fended Off Attempted Assault on London Train, New Biography Reveals
Scottish Brothers Set Record in Historic Pacific Row
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Court of Appeal Allows Asylum Seekers to Remain at Essex Hotel Amid Local Tax Boycott Threats
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
×