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Tourism Boom Driving Hotel Growth in APAC
Hotels in the Asia Pacific region are the top beneficiaries when it comes to room occupancy rates and underlying property performance.

By
Apac CIOOutlook | Friday, January 24, 2020
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Hotels in the Asia Pacific region are the top beneficiaries when it comes to room occupancy rates and underlying property performance. A survey report by real estate advisor CBRE revealed that Hong Kong, Tokyo, Osaka, Singapore, Sydney, and Melbourne all boasted occupancy rates of more than 80 percent.
FREMONT, CA: The Asian hotel sector accounted for a little over 5 percent of commercial real estate deals over the region last year. However, the small share of investment transactions does not do justice to the strong performance and growth potential of the market. Over the previous year, the Asian hotel industry has been one of the biggest beneficiaries of the global increase in travel and tourism investments.
Studies suggest that the Asia Pacific hotel market could be the standout region in terms of growth. Also, transaction volumes are expected to show a 15 percent year on year growth. At the same time, investments across European hotels are expected to decline by 5-10 percent, partly due to political instability in the region. In contrast, transactions in the American area are expected to remain flat.
Over the last decade, Asia has enjoyed steady growth in the international tourism sector. A report from the UN World Tourism Organization shows that the Asia Pacific region experienced the highest increase in international visitor arrivals in the first quarter of 2019, at 6 percent, in contrast to the 4 percent in Europe and 3 percent in America. The growth was driven by a 9 percent increase in arrivals in the northeast Asian region.
Hotels in the Asia Pacific region are the top beneficiaries when it comes to room occupancy rates and underlying property performance. A survey report by real estate advisor CBRE revealed that Hong Kong, Tokyo, Osaka, Singapore, Sydney, and Melbourne all boasted occupancy rates of more than 80 percent. Hong Kong has a staggering 90 percent occupancy rate, higher than the regional average of 71 percent. This has allowed the city's hotel market to achieve 10 percent year on year growth in terms of revenue per available room, reflective of the continued robust demand from mainland tourists.
The Japanese hotel industry has also been showing strong growth and is likely to benefit from the Summer Olympics in Tokyo in July 2020. The major global sporting event is expected to provide the country's hotel market industry a significant cash inflow leading to the event. Although the established hotels in Asia have performed well, it is the lesser-known ones that have been driving the growth and investment in the sector.