Surge in Hong Kong Hotel Investments: A Deep Dive into 2025 Trends

Hong Kong’s Hotel Investment Surge

On 12 November 2025, Hong Kong experienced a significant upswing in hotel investment, reaching USD 456.6 million (HKD 2.7 billion) in the first three quarters of the year. This marks a dramatic rise from the USD 221 million recorded during the same period in 2024, according to analysis from JLL. This turnaround can be attributed to several factors, including a low transaction volume in 2024 and the notable sale of Hotel COZi Harbour View at the beginning of the year for nearly HKD 2 billion.

Market Insights from JLL’s Ling Wei Tan

Ling Wei Tan, Senior Vice President at JLL Hotels & Hospitality Group, provided a promising outlook for the market in the coming year. With ongoing liquidation pressures from developers and High Net Worth Individuals (HNWIs), transaction activity is expected to increase. Tan notes that private equity and institutional investors are keen to exploit the performance-valuation gap prevalent in the market. Additionally, there’s an acceleration in converting hotels to student housing, especially with a growing influx of mainland Chinese students. This trend is bolstered by the government’s Hostels in the City Scheme, which allows for the conversion of existing commercial properties into student accommodations, further spurring hotel investment in Hong Kong.

Regional Investment Trends Across Asia-Pacific

Looking beyond Hong Kong, JLL forecasts that the total hotel transaction volume in the Asia-Pacific region will reach USD 11.9 billion by the end of 2025. Although this estimate has been slightly adjusted down from USD 12.8 billion due to prolonged transaction timelines and enhanced due diligence amid geopolitical uncertainties, investment activity is expected to pick up in the latter half of the year as a backlog of deals is anticipated to close.

Liquidity remains robust in core markets such as Japan, Australia, Greater China, Singapore, and South Korea, attracting significant institutional capital. Meanwhile, emerging markets like Vietnam are also expected to thrive, driven by strong tourism momentum.

Tourism Growth and Economic Indicators

The UN Tourism Organization predicts a continuous rise in international arrivals, estimating growth between 3% and 5% throughout 2025. Evidence of this optimism can be seen in regional performance data: international arrivals in the Asia-Pacific region increased by 11% year-on-year in the first half of 2025, nearing 92% of pre-COVID levels. North-East Asia, in particular, exhibited a robust recovery with a remarkable 20% growth, while countries like Japan and Vietnam saw each recording a 21% increase in arrivals, and South Korea achieved a 15% growth.

In terms of revenue, the performance metrics from Asia Pacific’s hotel industry have also shown promise, with a respectable 3% growth in revenue per available room (RevPAR) year-to-date by August 2025.

Future Projections for Asia-Pacific Hotel Investment

Looking forward, JLL anticipates that the Asia-Pacific hotel investment market will maintain its upward momentum, projecting total investment volumes to reach USD 13.3 billion in 2026. This represents an increase of over 10% compared to 2025. Despite ongoing global economic challenges, changing tourism behaviors, and solid investor interest are expected to provide a stable foundation for hotel asset values.

Challenging Economic Climate and Strategic Investments

According to Nihat Ercan, CEO of JLL Hotels & Hospitality Group, Asia Pacific, the current economic landscape and geopolitical uncertainties are shaping both investment choices and travel behavior. The hospitality investment scene is maturing, with asset quality and operational fundamentals driving capital allocation. While transaction volumes may not have reached historical highs, the clear recovery in tourism provides solid support for long-term asset values.

Ercan also highlighted a market marked by strong buyer appetite against a backdrop of constrained asset supply. Safe-haven destinations are commanding premium valuations, while emerging markets provide relative value opportunities. Furthermore, the prevailing macroeconomic uncertainties have led to extended due diligence periods and a heightened focus on cost management, resulting in more selective capital deployment strategies across the region.

This evolving landscape underscores the complexities and potential of the hospitality investment market in Hong Kong and the wider Asia-Pacific region, reflecting both challenges and opportunities for discerning investors.