SINGAPORE — Hotel recovery will be U-shaped and varied across
countries in the Asia-Pacific region, according to Colliers
International's Hotel Insights Q3 2020 report, a quarterly digest of key
trends in the hospitality sector.
Hotels across Asia Pacific continued to experience poor performance
in Q2, with overall room occupancy and average daily rate (ADR) showing
decreases to 33.9% and US$60.32, respectively.
In terms of room occupancy, most markets witnessed year-on-year
declines in excess of 40% while Singapore only declined by 14.5%.
According to the report, Japan, Thailand, Hong Kong and Vietnam led the
field in being the top five lowest performers
Govinda Singh, executive director and head of hotels & leisure
for valuation & advisory services, Asia, said: “The global economic
outlook is expected to remain subdued in the near term given the ongoing
uncertainty and risks of new waves of COVID-19.
"Therefore, the outlook for the hospitality industry in the region is
expected to be dimmed in the near term. Nonetheless, we believe the
hospitality industry will rebound when travel returns given its legacy
of resilience and agility."
He added: "To prepare for hotels re-opening, hoteliers will need to
take a cross-disciplinary approach so that hotels are well-positioned to
build public trust and offer compelling product and service offerings,
enabling hotels to thrive in the new operating environment with an
evolving customer mix and preferences.”
Weekend leisure segment to recover first, followed by business travel and MICE
Domestic travel will return first while international travel,
particularly if it involves air travel, will take a longer time to
recover. The weekend leisure segment is expected to lead the recovery,
driven by the pent-up demand for travel as international travel
restrictions and quarantine measures remain largely in place globally.
Underpinned primarily by essential business travel, the corporate
travel segment should be next to return, followed by the extended
leisure segment, as consumers’ confidence increases over time alongside
the lifting of international travel restrictions.
Meetings, incentives, conferences and exhibitions (MICE) and group
segments will likely be last to recover given the high adoption of
technology as an effective platform for MICE activities.
Health and safety to be a key consideration in travel planning going forward
As markets start to recover, consumers will prioritise health, safety
and hygiene when it comes to travel planning and decision making.
Personal space will also be more important; instead of large tour
groups, independent travel will take precedence and people will likely
prefer bespoke holidays and seek out travel experiences with a purpose
(such as health and wellness, eco-travel, etc.).
Technology will also take on a more critical role in the traveler
ecosystem and be a key tool in the revival of travel. Robots, chatbots,
automation, recognition technology, artificial intelligence (AI),
internet of things (IoT) and virtual reality (VR) will become
Resumption of domestic travel in China well underway
The gradual lifting of restrictions and the implementation of the
Chinese government’s stimulus plans, alongside the promotional
initiatives to spur growth and consumption, have encouraged the return
of domestic tourism in China.
This was reflected in the tourism receipts generated from domestic
tourism during the Labour Day holiday in May, which was RMB 47.6 million
(approximately USD 6.8 million), as compared to that of RMB 8.3 million
(approximately USD 1.2 million) during the Tomb Sweeping Day holiday in
In line with the improving trend of domestic tourism, the hotel
industry in China saw an uptick in occupancy levels month-on-month after
bottoming out in February. China has also been in discussions with
several countries on the easing of borders for essential business
Investor interest in the industry remains firm
The most liquid markets in Q2 were Japan and South Korea while
markets such as Hong Kong SAR, China and Taiwan saw little investment
sales during the quarter. With international travel restrictions in
place, domestic investors remain the dominant group in investment
In the coming months, investment activity is expected to gain pace as
investors move to take advantage of any opportunities that will emerge,
although cautious sentiment and stricter underwriting remain key given
the evolving situation.