Hotels set for recovery in Asia-Pacific as borders reopen

Cheryl Arcibal, South China Morning Post

Posted at Jul 05 2022 03:13 PM

But China’s decision to remain shut clouds overall picture

Hotels are gearing up for recovery as borders re-open in Asia-Pacific. Photo: SCMP / Edmond So
Hotels are gearing up for recovery as borders re-open in Asia-Pacific. Photo: SCMP / Edmond So

Hotels are gearing up for a recovery in Asia's travel industry as countries begin to roll back Covid-19 restrictions, with companies and even government agencies ramping up marketing campaigns.

However, with China's borders still closed, a full recovery in the Asia-Pacific tourism industry remains a distant prospect, with China accounting for more than 40 per cent of all tourists in the region historically, according to an analyst at real estate firm JLL.

Hotels have been one of the hardest-hit sectors by the pandemic. When Covid-19 first hit the region in early 2020, an estimated eight out of 10 hotels in Asia-Pacific had to temporarily shut down with estimated revenue losses of at least US$50 billion, according to property services firm Colliers.

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In Hong Kong the Shamrock Hotel, once a favourite hang-out for martial arts superstar Bruce Lee, closed down. Meanwhile, the Rosedale Hotel in Kowloon and the Grand City Hotel in Sai Ying Pun were both turned into co-living flats.

As countries in the region begin to either partially or fully reopen to visitors, a sense of optimism in the travel industry has become palpable.

For example, US-headquartered Radisson Hotel Group (RHG) is adding 1,700 hotels and resorts in the region by 2025 to its current 400 properties, as it seeks to quadruple growth across Asia-Pacific, according to Katerina Giannouka, president, Asia-Pacific, RHG.

"This growth of RHG's Asia-Pacific portfolio by 400 per cent by 2025 is the most aggressive push for the group in the Asia-Pacific region to date. This region is key to driving (our) growth ... enabling RHG to capitalise on the tourism rebound post-pandemic," she said. At the start of the pandemic, the group had to close 5 per cent of its properties in the region.

RHG will be focusing on key markets such as India, Vietnam, Thailand, Australia and New Zealand for most of its expansion plans. The company has also begun rehiring employees, Giannouka said.

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Meanwhile, Hong Kong-based Dorsett Hospitality International opened its Dao by Dorsett AMTD property in Singapore, the brand's first in Asia, on July 1 and has a few hotels in the development pipeline, said Yi Li Dawson, assistant director of marketing at the company.

"Our hotels have been hiring throughout the pandemic. With properties newly opened and soon to open, we are also (scouting) for new hotels and in new locations," Dawson said.

For booking platform, an increase in flight bookings and hotel rooms suggests that a recovery in the tourism sector is under way, according to Boon Sian Chai, general manager of Hong Kong.

Flight orders between South Korea, Vietnam, Japan and Malaysia on rose between 72 per cent and 98 per cent in June, compared to May. Bookings for promotions featuring hotels and attractions from Singapore, Malaysia and Thailand grew 102 per cent in May, compared to the same promo in March, Chai said.

Even government agencies are ramping up campaigns to get tourists back to their shores, a move that is likely to boost hotel occupancy in their home markets.

One example is the 'Come and Say G'Day - Australia' campaign launched in Singapore. It will be rolled out across Asia and the aim will be to get those people thinking about visiting Australia to take the next step, said Andrew Hogg, executive general manager, eastern markets and aviation, Tourism Australia.

China's strict Covid curbs a roadblock for growing investment in hotels sector

But China's sealed borders continue to cloud the overall picture.

"With a heavy reliance on Chinese visitation across Asia-Pacific, a continued border closure from China would have major implications on recovery for the region," said Tan Ling Wei, senior vice-president, investment sales, Asia-Pacific, JLL Hotels & Hospitality.

Dorsett's Dawson said "the absence of mainland Chinese tourists is definitely impacting the tourism industry".

"We are not expecting China to open up materially in 2022 and it's important that markets across the region look to diversify the markets from which they attract travellers to offset this loss," said Steve Carroll, head of hotels and hospitality, capital markets, Asia-Pacific, CBRE.

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