•Strong visitor arrivals helped drive robust demand for hotel rooms and pushed up citywide occupancy to 91.4% in 2018, an increase of 216 bps y-o-y.

•High occupancy was also supported by the lack of new hotel supply over the course of the year, with just 2,500 new rooms added to the market in 2018, compared to over 4,000 in 2017.

•Room Nights Sold (RNS) increased by +5.85% y-o-y in 2018, while Room Nights Available (RNA) increased by +3.36% y-o-y.

•RevPAR performance was strong across the different hotel segments, while occupancy and ADR were also positive.

•Chief Executive Carrie Lam’s Policy Address in October 2018 and the FY 2019/2020 Budget in February 2019 included details of new tourism industry policy and related initiatives.

•The hotel investment market experienced a quiet 2018 with just a few medium sized assets changing hands.

•The outlook remains positive but headwinds include the U.S.-China trade conflict, slower economic growth in China, currency fluctuation and competition from alternative destinations within Asia.