Eight out of 10 Asia-Pacific hotels had to close at peak of coronavirus pandemic, Colliers estimates
- The closures are likely to lead to losses of at least US$50 billion in first-half revenues for the segment, the property consultancy says
- About 2 per cent to 3 per cent of hotels in the region would have permanently shut their doors to guests, Colliers estimated
That is likely to lead to losses of at least US$50 billion in first-half revenues for the segment.
“The number of hotels that temporarily closed down varies across markets, but eight out of 10 hotels would have been closed at the peak of the pandemic especially in hard-hit markets such as Wuhan and Singapore, with only those home to quarantine guests and essential workers remaining open, albeit they were not allowed to accept other guests,” said Govinda Singh, executive director, hotels, Colliers International.
About 2 per cent to 3 per cent of hotels in the region would have permanently shut their doors to guests, he estimated.
“We will know more in the fourth quarter,” said Singh. “No doubt the first casualties will be those hotels that were struggling during the peak.”
Hospitality has been the hardest-hit industry as travel bans, lockdowns and border closures across the world designed to stem the spread of the deadly coronavirus led to room occupancy declining to less than half, and revenue per available room dropping by 40 per cent in the first three months of the year, according to Colliers’ Hotel Insights.
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International tourist arrivals are estimated to decline between 20 per cent and 30 per cent this year, with an estimated loss of US$300 billion to US$450 billion in tourism spending, according to the World Tourism Organisation of the United Nations.
For Asia-Pacific, “if we use 2019 as a proxy and assuming circa 28 per cent of tourism receipts is spent on hotel accommodation, we are looking at circa US$50 billion loss in revenues for the first six months of 2020,” Singh said.
Another survey, by hotel data-tracking firm STR, found that 38 per cent of hotels in Asia that it monitors had closed their doors, at least temporarily, as of April 30.
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The industry’s recovery is likely to be led by countries that are heavily reliant on their domestic market, particularly Japan, according to Nihat Ercan, managing director, head of investment sales Asia, at JLL hotels and hospitality group.
“Markets that had a supply-demand imbalance will face more challenges, and what Covid-19 had done was to simply exacerbate that pain,” Ercan said, citing resort markets such as Bali, Phuket, Koh Samui, the Maldives and the coast of Vietnam as examples.
