Once the world’s most-visited city, Hong Kong now converts hotels into student dorms

Hong Kong, once the world's most visited city, is increasingly converting its hotels into student dormitories. This shift is driven by the city's declining tourist arrivals and the need to create affordable housing for students. In 2018, Hong Kong welcomed 29.26 million overnight visitors, but this number fell to 23.19 million by 2025, according to official data.

The average hotel occupancy rate dropped from 91% in 2018 to 87% in 2025. Due to higher financing costs, many property owners have opted to sell their hotels or convert them into student accommodations. So far this year, Hong Kong has seen HK$8.2 billion worth of hotel property deals involving about 2,550 rooms, with most transactions being for student accommodation conversions.

Nina Hospitality, a leading hotel operator in Hong Kong, has been at the forefront of this trend. After renovating its hotels, the company sees an opportunity to attract more tourists and capture the growing demand for student accommodation. With the government's push to transform Hong Kong into a global education hub, the city is expected to face a shortage of more than 140,000 student beds by 2029-2030.

Analysts predict that hotels in higher market segments will continue to be upgraded and invested in, while mid-scale assets may be converted into student accommodations. The location of a property plays a crucial role in determining whether it should be used as a hotel or a student dormitory.