TL;DR Yes, Hosting Locally Does Help.
It seems that yes, it is better to host your website locally if you want to rank locally.
I spent quite a bit of time researching whether or not it was a wise thing to do to find a local Hong Kong website hosting company and I’m of the opinion that it helps.
Put it this way: whatever you can do to help local ranking: do it.
Website Hosting in Hong Kong
There aren’t tons of options for website hosting companies in Hong Kong but we ended up with ISHK (“Internet Solutions Hong Kong”) and I’m happy with them.
My search for hosting was entirely dependent on whether they host WordPress, which, frankly, every major host will.
They’ve been very prompt replying to customer enquiries for a few nagging things we had and altogether, I’d certainly recommend them if you’re looking to host a local website in Hong Kong.
The selling propositions of ISHK led us to host Growth Hackers Hong Kong with them; which were, namely, that all their servers are accessible from mainland China, i.e you’d like to think that your website will be indexed by Chinese search engines. This website is in English (as of November 2018) so that’s not really so important to us but I imagine that that is very important for other service providers that consider Hong Kong as being their hub.
The other major reason we hosted with ISHK is that they’ve reassured us repeatedly that their servers are located in Hong Kong, and I’m of the opinion that placing your website within your target city’s strategic location will help make your website an online success.
The best hosting I’ve ever experienced is WPEngine. I can’t praise those guys enough, but when local SEO is a vital factor to the success of your website we’d certainly encourage you to host with a local company; just make sure that the physical server and IP address you are allocated is local.
Where’s The Evidence For Hosting Locally?
This is one of those arguments which could become quite passionate, but my philosophy is that you should be using everything you can to nudge your rankings as much as possible.
As stated, I believe that hosting locally is important.
After all, think about it, Google (and other search engines) must place a slight slant towards locally held TLD’s that satisfy the searchers’ query.
Local content on a local domain served by local servers all seems to make sense to me, hence why this website is served in Hong Kong.