Visa-free travel and improved airlift, a winning combo

Across Asia Pacific (APAC), markets are showing significant signs of recovery as travel momentum remains on the back of continued improvement in flight capacity and visa facilitations adopted by several countries to boost international visitation. Malaysia, Singapore, South Korea and Thailand are amongst destinations that have implemented temporary visa exemption measures. Resultantly, the number of foreign visitors grew significantly, with Chinese visitation displaying one of the strongest annual growths after one year since the reopening of Mainland China to international travel. Down under in Sydney, corporate and MICE (Meetings, Incentives, Conferences, and Exhibitions) demand largely contributed to the increasing number of tourists. Meanwhile, Tokyo took advantage of the weak Japanese yen to record approximately six times the number of foreign tourists from 2023.

Limited new supply in Q1, yet anticipated surge in new openings in the coming months

New hotel openings remained limited in the first three months of the year. Hong Kong, Jakarta, Kuala Lumpur, Singapore, and Tokyo registered at most two new hotels, whilst the supply remained unchanged in Beijing, Seoul, Shanghai and Sydney. Only Bangkok recorded the strongest growth in supply with the completion of five hotels. With numerous projects being delayed as a result of the pandemic, it is expected that the remainder of the year should see a substantial increase in new supply entering the market. This influx of supply could potentially exert pressure on existing hotels.

Continued recovery in RevPAR Q1 2024

Overall, destinations in Asia Pacific have seen positive trends in their hotel trading performance across all segments. Kuala Lumpur, Bangkok, Beijing, Hong Kong, Jakarta, Singapore, Shanghai, Seoul, Sydney, and Tokyo have all experienced growth in revenue per available room (RevPAR), enabled by rising occupancy and average daily rate (ADR) levels remaining high. These positive trends can be attributed to factors such as increased international guests, sustained domestic demand, improved air traffic conditions, the Chinese New Year holidays and the hosting of mega events, such as Coldplay, Ed Sheeran and Taylor Swift concerts. The recovery of the hotel market in these cities indicates a positive outlook for the hospitality industry in the region in 2024.

Outlook: Optimism remains despite challenges Despite ongoing challenges in the global economy and geopolitical landscape, the growth in APAC tourism industry that continued in Q1 2024, is expected to moderate yet remain elevated, especially with the numerous visa-exemption measures implemented and/or extended to further boost foreign visitation. Hotel trading performance will heavily depend on the sustained growth in international tourists, particularly the return of Chinese visitors, strong demand for leisure travel, as well as the resurgence of corporate and MICE activities in the region. In some destinations such as Beijing, Shanghai, Singapore and Sydney, MICE is expected to continue driving demand in 2024 as full-scale return of events, conferences, conventions and concerts have been lined up for the year.