APAC remains the fastest growing region in the world

Asia-Pacific remains the fastest growing region in the world, says Whitebridge Hospitality in its November 2019 Asia Pacific Hotels Monitor, Issue 6… and in 2019, the region could account for more than two-thirds of global GDP growth.

According to the IMF, despite global economic uncertainties (who is going to call the timing for the impending recession, certainly not me) and slowing regional growth (for example, China recorded GDP growth of 6% in Q3 2019, the slowest rate of growth in 30 years), Asia is driving global growth, even though all is not rosy.

The economic uncertainties of the region are beginning to influence local hotel markets. Certainly there are more cities in negative RevPAR territory than in recent years. Notable fallers include: Hong Kong SAR (most likely due to the umbrella-filled streets deterring visitors) and the island paradise of Phuket (-10.8%, reportedly due to a sluggish world economy and political uncertainty in Thailand).

In what is still a relatively buoyant region in terms of construction activity, construction cost inflation is expected to continue to grow in most markets (aside from Hong Kong, where tender prices are in decline).

A rich variety of transactions were concluded in the past 12 months, including some big corporate deals, mixed-use schemes, portfolios, resorts and deals out of administration. Australia was the most dynamic country, with Singapore shown to be singing from a similar hymn sheet.

Numerous markets in the region declined on a rolling 12-month average basis between October 2018 and September 2019. Hong Kong SAR’s RevPAR declined by -7.5%, which was mostly driven by the drop in Occupancy due to recent protests. Phuket and Kuala Lumpur have both recorded steep RevPAR declines at -10.8% and -7.7%, respectively, as a result of decreases in both ADR and occupancy.

On the positive side of growth, several key markets in the region (such as Delhi NCR, Mumbai and Metro Manila) reached RevPAR growth above +4%, primarily driven by an increase in ADR. Mumbai is also doing well, with a +4.3% increase in ADR, which is driven by a +3.6% increase in ADR.

The region boasts a strong active pipeline, with over 840,206 rooms in the planning, final planning, or construction stages. Shanghai, Bangkok, Tokyo and Jakarta have the largest pipelines, with each market having over 10,000 new rooms set to open soon.


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