In this week’s roundup of news from the Asia/Pacific region: STR performance data; the impact of canceled events; the development of palace hotels in India: 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.
STR: Asia/Pacific hotel performance for February 2020
Hotels in the Asia/Pacific region reported mostly negative year-over-year results for the month of February 2020, according to data from STR, parent company of HNN. Occupancy fell 37.7% to 41.2% and average daily rate grew by 1.9% to $107.35, resulting in revenue per available room falling 36.5% to $44.27.
This region was the first to show a significant impact of the coronavirus (COVID-19) on hotel performance. Specifically in China, occupancy fell by 75.9% to an absolute level of 14%. Occupancy in Singapore fell by 46.9% to 46.4%, in South Korea by 30% to 42.7% and in Japan by 22.4% to 64.7%.
The impact of events moved, canceled due to pandemic
STR’s Barbara Fraccascia and Claudia Alvarado took an in-depth look at the effects of COVID-19 and social distancing have had on major events around the world.
Fifty-seven percent of the tracked events were postponed to the third and fourth quarters of 2020, comprising mainly trade shows and sporting events, they wrote. Thirty-eight percent were canceled, made up mostly of annual repeating events. Five percent of events were modified, such as by canceling the physical event and turning it into a virtual meeting.
Marriott’s Sorenson: ‘We’re in uncharted territory’
During an update on how the company is responding to the COVID-19 outbreak, Marriott International President and CEO Arne Sorenson spoke about hotel performance and closings in the Asia/Pacific region, reports HNN’s Bryan Wroten. During the first two months of 2020, RevPAR in the region fell 25% year over year, breaking down into a 52% decline in Greater China and 8% in the rest of the region.
Occupancy rates in China have started to improve as people are beginning to return to work. Marriott closed more than 90 hotels in Greater China during the height of its outbreak, but that number has dropped to fewer than 30, as of 19 March.
“It is encouraging to see the trend line,” Sorenson said. “China and the entire Asia/Pacific region is starting to improve. However, as the virus has spread, there has been a sudden sharp decline in demand throughout the rest of the world, and RevPAR (at) our hotels has dropped dramatically over the last few days.”
China, Italy KPIs portend tough times for US hotels
The hotel performance seen in China and Italy because of the COVID-19 outbreak is a sign of what U.S. hoteliers should expect, writes STR’s SVP of Lodging Insights Jan Freitag.
“Since the hotel performance impact has been visible longer in other countries around the world, STR can now overlay occupancy results for those markets to understand what might happen in the U.S.,” he writes.
Following COVID-19 developments, industry’s response
To help track major events around the world caused by the COVID-19 outbreak, HNN’s Steph Ricca put together a timeline of the events and their effects on the global hotel industry. The timeline starts in January 2020 and runs through its latest update on 17 March, covering the start of the outbreak in Wuhan, China, Asian hotel closures, travel warnings, publicly traded hotel companies withdrawing 2020 guidance and more.
The measures it takes to build palace hotels in India
Hoteliers in India are taking advantage of travelers’ desires for “living like a maharaja” by restoring historical palaces and forts, writes HNN contributor Chitra Balasubramaniam.
Though these are former palaces and other historical buildings, location matters as much as it does for every other hotel.
“Several heritage properties are not situated in ideal locations, making it difficult to be accessed by both business and tourists. So land in the right location, with a particular shape and size, (it) made sense to build a modern palace,” said Faziruddin Nirban, director and owner of Saira Estates Pvt. Ltd.
Hotel executives on the business impact of coronavirus
In this roundup, HNN collected quotes from hotel executives of publicly traded hotel companies speaking about COVID-19 during recent earnings calls. Executives spoke about hotels closing in the Asia-Pacific region as well as year-over-year performance drops.
Deals and developments
- Australia’s Black Rhino Group acquired the Craig’s Royal Hotel Ballarat in Victoria for more than 12 million Australian dollars ($7.1 million).
- Singapore-based Banyan Tree Holdings Limited’s Banyan Tree Hotels & Resorts and Htoo Hospitality of Myanmar-based Htoo Group of Companies have formed a joint venture to create a hotel management business in Myanmar.
- The 144-room Mantra Chatswood Syndey underwent a multimillion-dollar renovation updating its interior design.
- India’s Satyadeo Hospitality Private Limited acquired the 73-room Golden Tulip in Bengaluru.
- The Savetsomphob family, owners of the Thailand-based food import business Sino-Pacific Trading Company Limited, acquired the 145-room Vibe Hotel Darling Harbour in Sydney, Australia, for AU$108 million ($63.9 million).
- Malaysia’s IGB Corporation Berhad sold the 60-room Pyrmont Hotel in Sydney for AU$28.7 million ($17 million).
- Australia-based Trepang Hotel Group acquired the 72-room Kimberley Sands Resort and Spa in Broome, Australia.
Compiled by Bryan Wroten.