A cursory glance at the hotel development pipeline in the Asia-Pacific region shows how dominant the big global chains are. The eight largest operators, which include Marriott and Hilton, account for 74 per cent of expected completions in the next five years, according to CBRE data.
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Moreover, the number of brands operated by the eight companies more than doubled in the past decade to 130 at the end of last year, with upscale and luxury hotels accounting for the bulk of the growth in the region. In the Asia-Pacific hotel investment market, upscale and luxury full-service properties accounted for 45 per cent of transaction volumes last year, according to JLL data.
However, in China, large domestic operators such as H World Group and Jin Jiang International rule the roost. Other countries in Asia, such as Japan and India, have big domestic tourist markets, but China is in a different league altogether.
According to HSBC, airline passenger traffic and capacity on domestic routes had already recovered to 2019 levels by April 2023. According to the Ministry of Culture and Tourism, Chinese travellers made 1.8 billion trips within the country in the first quarter of this year, an increase of 26.4 per cent in annualised terms.
Yet despite the strong performance of China’s domestic tourist market, hotels’ average occupancy levels, daily room rates and revenue per available room (RevPAR) – the industry’s key performance measures – in the first five months of this year declined in annualised terms. Even in Tier 1 cities, hotels are underperforming the wider Asia-Pacific market.
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In Tokyo, the best-performing hotel market in Asia amid a colossal boom in overseas tourism in Japan, average daily rates and RevPAR were up a staggering 26 per cent in May on an annualised basis. In Shanghai and Beijing, by contrast, they were down 0.5-3 per cent, according to CoStar data.
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