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Hotels in Asia Pacific Region See Signs of Recovery

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Hotels in the Asia-Pacific region are still in need of international travel, but there are other promising signs contributing to a recovery.

Full economic recovery will depend on the path of the pandemic, said STR Area Director, Asia Pacific, Jesper Palmqvist, speaking during the STR COVID-19 Webinar: Asia Pacific Hotel Performance Analysis.

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He noted the U.S. and Europe have opened up more than Asia Pacific in regard to companies returning to office and the easing of travel restrictions.

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STR is CoStar’s hospitality analytics firm.

“What do we need to get rid of? Travel restrictions,” he said, noting there’s been more positive news in the fourth quarter of this year than before.

Palmqvist said China is the market that stands out as it has a zero-tolerance COVID-19 policy. Japan, on the other hand, eased restrictions for vaccinated business travelers. Korea is looking to welcome arrivals by the first quarter of 2022. India is officially open, driving domestic arrivals. Cambodia is allowing vaccinated travelers to forego testing and quarantining.

“So we have these signals we haven’t seen yet,” he said.

Eighteen months ago, he thought Asia was doing well in curbing the virus but it was resulting in a decline in travel revenue.

Aside from Singapore, average daily rates indexed to 2019 have improved across the Asia Pacific.

Looking at Singapore, rates are low from January to October 2021, indexed to 2019, because of the low rates contracted by the government and limited staycations, he said.

Business on the books for Singapore continues to improve week by week to lift that shelf of occupancy contracted by the government. But by the end of this year, it will slow down.

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In terms of profitability for the Asian sub regions, Palmqvist said numbers should start to trend upwards in the next three or four months, especially in markets that haven’t seen that yet.

In Southeast Asia, he highlighted Langkawi, Malaysia, as a market that has seen a boost due to the opening of a domestic travel bubble in September.

“When it [fully] opens, what a story,” he said.


Despite the delta variant ravaging throughout India beginning in May, it managed to reach 82% of 2019’s revenue per available room in a span of five months for October, said Matthew Burke, regional manager, Pacific, STR.

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“That can’t all be because of one city or one particular segment, like the leisure traveler. It has to be a broad brush,” he said.

When comparing some leisure locations with business locations in India, he said in absolute occupancy terms there’s “pretty much between a 50% to 75% band; both business and leisure locations have been trading through that.”

For weekdays and weekends, similar to the first recovery phase at the end of 2020, it’s leisure locations that have led occupancy on an indexed basis.

“But, again, this time around and surpassing now, the business locations are now rebounding,” he added. “There’s a much more sustainable mix of growth that we have seen over the last couple of months, which is incredibly encouraging.”

There is a distinct difference with ADR, however. Average rate for leisure locations in absolute terms has been peaking on weekends. Business travel locations have been much more subdued.


Burke said throughout 2020, Tokyo and Osaka have been laggards in the recovery because they rely on business travel as well as international.

The amount of leisure travel isn’t stimulating enough of a return like other markets seeing, where average rate is going above 2019 levels, he added.

Kyoto and Tohoku did start to see weekend peaks appear in October as well as absolute occupancies starting to hit between 50% and 75%.


Burke said Australia is now on its second journey of recovery. In the first half of 2021, there was a meaningful level of return in both Australia and New Zealand, but the delta variant changed the game.

With half of Australia’s population in lockdown, cities and regional areas were affected.

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“If you look more specifically at the capitals, you can very clearly see that if you aggregate the three cities that were locked down [Sydney, Melbourne and Canberra] they pretty much hovered around a 20% occupancy level for the past three and a half months,” he said.

The average 14-day outlook since the beginning of the year shows that while occupancies are starting to improve, they are still below pre-delta levels.

Burke said Australia is starting to see a rise in bookings in the last couple of weeks as people gained more confidence and summer is approaching.


Christine Liu, regional manager of North Asia at STR, said Hong Kong’s borders are still closed, which hampers the market’s reliance on international and Mainland Chinese tourists.

She added there’s no signs of China reopening borders anytime soon. Additionally, there’s still uncertainty around the Winter Olympic Games set to be held in Beijing this upcoming February.

The seven-day rolling occupancy from Jan. 1, 2018, to Nov. 13, 2021, shows Hong Kong is floating between 60% to 65% occupancy. Overall, occupancies are trending in a better direction than last year, she said.

ADR in Southwest China, indexed to 2019, outperformed pre-pandemic levels. The Northwest, South and Central were almost there. Beijing was one of the markets that dragged Northern China down, Liu said.

In terms of profits, indexed to 2019 from January to September 2021, Hong Kong is “very flat,” Liu said. Beijing, year to date, reached 40% of 2019 levels, and Shanghai outpaced Beijing.

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