Hotels Market InsightsFebruary 28, 2023 / By
Tourism thriving with the year-end festive holidays
At the end of 2022, most of the travel restrictions have been lifted in the region with the long-awaited announcements from Japan and Hong Kong dropping their remaining requirements to inbound travellers. In markets where restrictions were lifted earlier in the year such as Thailand, Singapore, Indonesia and Australia, more MICE events were organised, and the year-end festive holidays have encouraged more leisure tourists to travel. However, domestic demand has continued to be predominant at the end of 2022 in most of the destinations, especially where incentives to promote domestic travel remained in place, such as in Japan. Still pursuing the ‘zero-COVID’ policy in the last quarter of the year, China was the only country in Asia Pacific to record stagnant demand, with tourism flow mostly limited to suburban travel, especially during the National Day Festival and China International Import Expo (CIIE).
Limited new hotel supply
New hotel supply in Asia Pacific (AP) markets remained limited in the last three months of 2022. Most of the newly opened hotels were in the upscale and luxury segment with strong international brands or rebranding of older hotels. No new supply was added in Tokyo and Sydney. 2023 is expected to witness the largest incoming supply due to the delays with COVID-19, especially in markets like Bangkok where more than 9,500 keys are slated to enter the market in the year ahead.
Rising trading performance
With the significant improvement in domestic and international visitor arrivals, most of the destinations in AP have recorded strong growth in hotel trading performance, closing even more the gap with pre-pandemic levels. The revenue per available room (RevPAR) in Hong Kong, Kuala Lumpur and Tokyo was boosted by a continued increase in occupancy with the return of foreign travellers. Meanwhile, the improvement in RevPAR in Singapore, Seoul and Sydney was driven by a strong rise in average daily rate (ADR) as a result of a robust demand from leisure, corporate and MICE visitors. Only Chinese hotels saw their performance declining due to outbreaks in major cities across China and strict social restrictions still in place at the end of 2022.
Outlook: Optimism for 2023 with the announced reopening of China
With China significantly easing its border restrictions starting January 8th 2023, there is optimism surrounding the pace of recovery in AP destinations. With most countries having diversified their source markets in 2022 while waiting for China to reopen, the long-awaited decision by the Chinese Communist Party to end its ‘zero-COVID’ policy is expected to contribute to the increase in trading performance. However, with the current challenges linked to airlift to and from China, a significant rebound should take time and is expected to be felt in the second half of 2023.
More on 'Hotels' in 'Asia Pacific'
- Asia Pacific hotel investment outlook and trends 2019February 13, 2019
- Transparency: AP moving in the right directionJune 29, 2018
- Storing wealth for the long termJanuary 8, 2018
- New Year, New Real Estate Daily BlogsJanuary 9, 2017
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