In this week’s roundup of news from the Asia/Pacific region: India’s domestic demand; a start to the Chinese recovery; STR monthly data: and more.
Hotel News Now each week features a news roundup from a different region of the world. Today’s review covers the Asia/Pacific region.
India’s huge home market underpins rebound
As India’s domestic travel markets normally make up 85% of the country’s hotel demand, hotels in India are well-positioned to recover occupancy levels following the coronavirus pandemic, writes HNN’s Terence Baker from the online conference Hospitality Tomorrow Episode 2. However, that recovery will need the help of state and federal governments to fully get back on track.
“To offset the long-term impact of debt, it is important the government considers a one-time waiver to restructure business, to help take the pressure off,” said Neeraj Govil, SVP of South Asia for Marriott International. “It’s an important ask, but one hopefully under consideration to ensure the long-term viability of assets.”
Chinese hotels reopening, but not in normal environment
The recovery is starting in China’s hotel industry, but it’s at a careful pace starting with the domestic resort market followed by midscale and upper-midscale urban hotels, writes HNN’s Terence Baker from the online conference Hospitality Tomorrow Episode 2.
“Resorts are starting to do very well, and midscale and upper midscale hotels also are starting to see pickup. China is a very resilient place, a very business-focused place, and it will not be long before we see things back to normality,” JA Resorts & Hotels CEO Anthony Ross said.
China hotel rebound gets boost from holiday travelers
The Labour Day holiday in China was “quite the supercharger” for hotel occupancy, yielding “levels certainly not seen in a long time,” said Jesper Palmqvist, area director for the Asia/Pacific region for STR, during a weekly video on Chinese hotel performance, reports HNN’s Robert McCune. STR is the parent company of Hotel News Now.
Absolute occupancy grew from 33% the day before to in the mid-40s 1 May and then near 50% on 2 May. One of the “rebound heroes” was Qiandoa Lake outside of Hangzhou, where absolute occupancy for that weekend averaged more than 95%.
“On the 2nd of May, (occupancy for the market) was millimeters from 100%,” Palmqvist said, noting these “extraordinary numbers,” including average daily rates triple what they were the week prior, were driven by “genuine leisure traffic.”
STR: Asia/Pacific hotel performance for March 2020
Hotels in the Asia/Pacific region reported “all-time lows” in the three key performance metrics in March 2020, according to data from STR. Occupancy fell 59.5% to 28.3% and average daily rate dropped 17.6% to $80.82, resulting in revenue per available room falling 66.7% to $22.85.
Hotels in China reported occupancy decreasing 65.4% to 23.2% and ADR falling 35.4% to 332.41 Chinese yuan ($48.81), combining for a RevPAR decline of 77.6% to 76.96 yuan ($10.84).
Hotels in Singapore reported occupancy fell 53.6% to 38.3%, which combined with a 19.1% drop in ADR to 212.40 Singapore dollars ($149.97), resulting in a 62.4% drop in RevPAR to SG$81.35 ($57.44).
Malaysian hoteliers fear record-low occupancy will last months
As COVID-19 spread through neighboring countries, hoteliers in Malaysia worried they would see record-low occupancy levels lasting months, writes HNN contributor Tamara Thiessen.
Yap Lip Seng, CEO of the Malaysian Association of Hotels, said hotels likely would come to a near standstill as travel has dropped. The association predicted a loss of 560 million Malaysian ringgit ($128.8 million) by the end of 2020 and slow-growing occupancy, which could reach 25% in June.
That will “probably continue that way at least for another six months,” Lip Seng said, adding that Singaporeans, Indonesians and Chinese made up 64% of total arrivals in 2019.
What Lone Star’s Unizo deal could mean for M&A in Japan
Following a bidding war, U.S.-based Lone Star acquired Japanese hotel chain Unizo Holdings for $1.9 billion, reports HNN’s Terence Baker. The company outbid SoftBank Group affiliate Fortress Investment Group and Blackstone.
Unizo owns 27 hotels, including four in development, through three brands, and all of its properties are in Japan. The company also operates a residential business with a portfolio of 50 buildings, with most in Japan and six in Washington, D.C.
Deals and developments
- Hong Kong-based Hanison Construction Holdings is in the process of acquiring the 143-room Travelodge Central Hollywood Road in Hong Kong for a reported $120 million from joint-owners Pamfleet and ICP Limited.
- The Joint Regional Planning Panel in Newcastle, Australia, approved the 106-room QT hotel as part of the redevelopment of the David Jones building.
- Shanghai Xinhaolong Property Development Company Limited entered into an agreement with Shanghai Zhengjiu Industrial Company Limited to sell the Guoman Hotel for 1.44 billion Chinese yuan ($202.8 million).
Compiled by Bryan Wroten.