Hotels Market Insights

May 28, 2022 / By ,

An uneven pace of tourism recovery, with Southeast Asia ahead of the reopening

Countries that have started to ease their restrictions related to COVID-19 at the end of 2021 have maintained the momentum in the first quarter 2022. Singapore extended quarantine-free travels to visitors from other countries such as Hong Kong, Malaysia, Saudi Arabia, while Thailand, Vietnam and Malaysia have continued to lift restrictions within the country, allowing normal life to gradually resume. Conversely, Mainland China and Hong Kong are still pursuing the ‘Dynamic zero-COVID’ policy, keeping the border restrictions in place and limiting the number of inbound tourists. The Omicron variant has also forced Japan to maintain its ‘state of emergency’, and Korea to remain cautious in its reopening plans.

New hotels mainly located in reopened countries

Following the trend at the end of 2021, new supply continued to be generally limited and delayed in most destinations in Asia Pacific. New openings in the first quarter 2022 included rebranded Singapore hotels (voco Orchard Singapore, Hilton Singapore Orchard), and five hotels in Bangkok, anticipating tourism arrivals when travel restrictions are relaxed. The Shanghai hotel landscape also counted a new upscale hotel: the 246-room Artyzen Habitat Qiantan Shanghai.

Domestic tourism remains the key driver while the region observes green shoots of international arrivals

Tourism in the region continues to be driven by the domestic demand, especially in countries where restrictions are maintained. In destinations with less movement control measures, staycations still accounted for the bulk of the activity, but international tourists are slowly returning, fuelled by a strong desire to travel again. Although business travel leads the way, leisure tourism is gradually resuming, especially in destinations such as Singapore and Bangkok.

The continued easing of restrictions supports the improvement in trading performance

In the first three months of 2022, the hotel sector registered notable improvements in trading performance across all destinations in Asia Pacific, encouraged by the gradual easing of restrictions. Outstanding occupancy levels have enabled hotels to register an impressive jump in RevPAR on average. The first half of the year should record higher performance for hotels when compared with last year, with the return of international tourists in opened countries coupled with a strong domestic demand in other parts of the region.

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