The View | Why Asian hotels are recovering just fine, even without Chinese tourists
- A recovery is taking hold in Asia, as economies reopen and pent-up demand for leisure and corporate travel drives up occupancy and daily rates
- While China’s zero-Covid policy continues to challenge Asia’s hotel industry, the most pressing issue now is the acute shortage of airline staff
To say that the hospitality industry has had a rough time over the past two-and-a-half years would be a gross understatement. The Covid-19 pandemic pulled the rug out from under the sector as lockdowns and travel restrictions were imposed.
In the Asia-Pacific region – which relies heavily on international tourism and has a thriving meetings, incentives, conferences and exhibitions market – hotel occupancy rates plummeted to between 20 and 40 per cent soon after the pandemic erupted. In 2020, transaction volumes in the region’s hotel market slumped to just over US$6 billion, less than half their level in 2019.
Moreover, investment activity in the sector has picked up sharply, underpinned by record levels of capital waiting to be deployed, particularly among private investors across the region. In the first nine months of this year, transaction volumes reached US$8.4 billion, 72 per cent of which was in Japan, Australia, South Korea and China, data from JLL shows.
Although Japan relies mainly on domestic tourism, Nihat Ercan, head of investment sales for Asia-Pacific at JLL, said the reopening sent a strong signal that Asia’s second largest economy, and the region’s most actively traded hotel investment market, was returning to normality. “Asia is emerging from its Covid slumber,” Ercan said.