Hotels Market Insights

November 29, 2022 / By ,

More international travellers returning amid a predominance of domestic tourists

In the third quarter of the year, destinations in Asia Pacific have benefitted from the summer holiday period. Tourism flows have continued to increase with more easing of travel restrictions. Additionally, with corporate demand picking up in September, the region has welcomed more corporate visitors. Markets like Bangkok, Singapore, Jakarta, Kuala Lumpur and Sydney, that have lifted border control measures earlier this year, were able to welcome more international visitors than other destinations as airlift has continued to improve. However, domestic tourism continued to be predominant in Asia Pacific.

Increasing number of new hotels opens during the third quarter

With the delays in hotel openings towards the second half of 2022, the region counted a higher number of new hotels than in the previous quarter. In Q3, some markets have welcomed major brands such as the 155-room The Standard in Bangkok, the 220-room Park Hyatt in Jakarta and the 312-room HUALUXE Changfeng Park in Shanghai. No new supply entered the market in Beijing, Singapore and Sydney. However, more supply is expected to complete by the end of 2022. In South Korea specifically, the majority of new hotels in the pipeline are concentrated in satellite cities of Seoul and regional markets.

Continued momentum in hotel trading performance in opened markets

Hotels have continued to register improved trading performance on the back of significant growth in tourism arrivals. In most destinations in the region, with the summer holidays in June and July and corporates travelling during the month of September, hotels were able to record higher occupancy rates than during the first half of the year, supporting the continued growth in average daily rate (ADR). Singapore stood out from the crowd as the labour shortage has limited hotels from operating at full capacity. As a result, the occupancy rate in the city-state has decreased, however this has been offset by a significant jump in ADR which in turn has enabled revenue per available room (RevPAR) to increase. Mainland China was the only country in the region which registered declining performance y-o-y by maintaining strict lockdown measures with their zero-COVID policy.

Tourism activity in the year-end 2022 expected to strongly pick up with more countries reopening

With the announcements in September that major destinations such as Japan and Hong Kong will reopen to international travellers, Asia Pacific is poised for a quick rebound towards the end of the year. Major global and regional events organised in Q4 should draw more interest from corporates and MICE and this should balance the current domestic-led trend. However, with mainland China still pursuing a zero-COVID policy, the absence of Chinese tourists in 2022 will continue to limit the growth of tourists in the region, especially in markets heavily reliant on mainland China.


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