Wave of Initiatives Hit Hong Kong’s Hospitality Sector

Hong Kong’s tourism, events and accommodation sectors have been powered by a wave of initiatives in the last few months, Global Commercial Real Estate Services Colliers said on Tuesday.

The initiatives include the Expression of Interest (EOI) campaigns for the government’s newly planned eco and yacht tourism development sites, to the sold-out Football Festival with Liverpool, AC Milan, Tottenham Hotspur and Arsenal gracing the city with their presence.

In its latest report entitled “Hong Kong Hospitality Insights for the month of August 2025, Colliers said that the Ani-Com & Games 2025 in July attracted thousands of visitors, as did the Saudi Super Cup in August, as Hong Kong and the Middle East deepen their collaboration.

The government launched its ‘Hostels in the City’ scheme in July to facilitate and incentivise private investment in the conversion of underperforming hotels and commercial buildings to student accommodation.

Adding to the city’s 330 hotels, the 274-room Motto by Hilton Hong Kong SOHO opened its doors, providing a new lifestyle offering and setting a benchmark in terms of sustainability, placemaking, innovation and design, Colliers said.

“It marks MOTTO by Hilton’s first entry in Asia-Pacific. On the F&B front, US pretzel brand Auntie Anne’s opened its second store in Hong Kong in Causeway Bay, showcasing how brands are positioning themselves to offer new experiences to customers,” Colliers said.

The hotel investment market is also witnessing a notable increase in activity, and a stroll around Tsim Sha Tsui at weekends demonstrates that visitor numbers are up and the streets are buzzing. Yet the challenge remains in translating that into operational performance across the hotel, retail and F&B sectors.

Visitor Numbers Up

The report also said that from January to June, the city had 23.64 million visitors, up nearly 11.7% from the same period in 2024. Overnight visitors accounted for 11.28 million, up 7%. 65% (11.3 million) were from the China Mainland, and 35% (3.95 million) from other markets.

For the first half of 2025, hotel occupancy was 85% against 83% for the same period in 2024. Despite a stronger occupancy rate in Q1 of 88%, performance in Q2 trended seasonally lower, with 86%, 82% and 80% recorded in April, May & June respectively, averaging 83%. Nevertheless, the average Q2 figures were marginally up, 2% on 2024, although June trailed by 1%.

More Investments Flowing

While several marketing campaigns and tender processes kicked off for the sale of various hotels, Q2 itself was fairly limited in terms of investment deals, reflecting a total H1 figure of just over $380 million.

The sales included the 800-key Winland 800 Hotel and 100-key MK Stay, and the transfer of Hotel Cozi Harbourview to Nanyang Commercial Bank. On the platform side, Rava Partners, a subsidiary of Hillhouse Capital, took a majority stake in Dash Living for up to $150 million.

Shifting across Q2 and Q3, The Henry sold for $23.million and Hotel Ease Mong Kok was recently acquired for $55.76 million – with both hotels targeted for student accommodation conversion. With various deals pending at the time of writing, the market will see additional transactions.

The government’s Hostels in the City scheme is the catalyst as investors target under-performing hotels and Grade B and C office assets for conversion to student hostels. The large anticipated supply shortfall, predictable cash flow, lower entry pricing and government policy support, is driving local and international investment interest in the sector.

Even the boutique and major hotel investors and operators are sensing an opportunity to curate new offerings in the city, as recent downward pricing adjustments open the door to improved returns, the report added.