• Return of Chinese and strong domestic demand influence tourism recovery.

• Supply growing at different paces in Q1 2025.

• Performance influenced by global and local environment.

The tourism industry in APAC is experiencing a broad but uneven recovery in early 2025. Most cities are seeing growth but at varying paces. For example, Bangkok maintains higher-than-pre-pandemic tourist numbers despite a slight decrease. Cities are using diverse strategies, such as visa policy changes and targeted marketing, to attract visitors and boost their tourism markets. The return of Chinese tourists is playing a crucial role in the recovery of many destinations. Despite challenges, the industry shows resilience as it rebounds from the pandemic.

The hotel landscape across major cities in 2025 shows diverse growth patterns. Markets like Bangkok and Shanghai have already seen significant additions, while others such as Beijing, Hong Kong, and Tokyo anticipate more substantial growth later in the year. Luxury and upscale segments are driving much of the new supply, particularly in Kuala Lumpur. Jakarta’s growth is primarily in serviced apartments, whilst some cities are seeing growth influenced by new infrastructure projects with hospitality components. Overall, the region shows cautious but steady hotel supply expansion, with increased capacity expected in late 2025 and beyond.

In Q1, whilst some markets like Ho Chi Minh City, Tokyo and Sydney are showing strong growth in trading performance from the same time last year and attracting investor interest, others are facing challenges. This variability is influenced by factors such as local economic conditions, the pace of tourism recovery, and global economic pressures. Despite these differences, there is an overall sentiment of resilience in the market, with many cities showing signs of improvement or stability in their hotel performance metrics from last year.

Outlook
Looking ahead to 2025, the hospitality market in Asia Pacific presents a mixed picture of recovery and challenges. Markets like Sydney are gaining momentum, whilst others face uncertainties due to global economic pressures and geopolitical tensions. Jakarta faces potential setbacks from government austerity measures, whilst Kuala Lumpur balances recession concerns with promotional efforts. Hotels are grappling with major economic changes, shifts in travel behaviors, and the ongoing challenge to control increasing operational expenses. The industry’s success relies on flexibility to capitalize on recovery opportunities whilst navigating persistent challenges in a volatile global environment.