HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s review covers the Asia Pacific.
Rates hold strong despite demand decreases in APAC
Hotels in the Asia/Pacific region experienced mixed results in the three key performance metrics in February 2013 when reported in U.S. dollars, according to data compiled by STR Global, sister company of HotelNewsNow.com.
In February, the Asia/Pacific region’s occupancy ended the month with an 8.1% decrease to 62.5%, its average daily rate increased 3.5% to $135.50 and its revenue per available room was down 4.8% to $84.76.
“The region saw strong performance increases across all three key metrics,” Elizabeth Winkle, managing director of STR Global, said in a news release. “However, China primarily saw decreases across the country due to the Chinese New Year, which fell on 9 February this year (compared with 23 January 2012). The country saw steep declines in both occupancy (-19.9% to 48.9%) and RevPAR (-13.8% to $52.49). Historically, hotels see a dip in performance during the New Year celebrations as national holidays is observed and commercial activities decrease.”
HVS highlights traveler data in APAC
Hong Kong received more than 48 million visitors in 2012, including more than 13 million visitors during the fourth quarter alone, driven by a record 9.6 million visitor arrivals from mainland China, according to HVS’s Greater China Quarterly Newsletter.
Other highlights from the report:
- Macau’s visitor arrivals continued to decline in the fourth quarter of 2012. Macau’s occupancy level in 2013 is expected to remain strong, and leisure demand from Chinese tourists will continue to dominate the market. However, regional gambling competition is set to increase, limiting the potential for visitor arrivals growth in the absence of new additions to supply.
- China welcomed 6.8 million visitors in the fourth quarter of 2012 with the Japanese market recording a significant drop due to diplomatic tensions. Among the top 10 hotel markets, Changsha, Beijing and Fuzhou performed particularly well, while Sanya and Shanghai experienced a drop in RevPAR.
- Taiwan’s visitor arrivals continued to grow healthily in the fourth quarter of 2012. As somewhat of a latecomer to the tourism trade, Taiwan has relaxed cross-straits travel restrictions, significantly stepped up its marketing efforts and executed a number of promotional campaigns boosting visitor arrivals.
Hoteliers adapting to macro changes in China
China’s economy is experiencing widespread changes and hoteliers there—and worldwide—must adapt their strategies to stay relevant, writes HotelNewsNow.com’s Jason Q. Freed from HVS’s ninth annual China Hotel Investment Conference in Shanghai.
Recent news about a slowdown of China’s gross-domestic-product growth is not deterring those looking for opportunity in the region. While the country is not as hot as it was five years ago, an emerging middle class still provides an attractive source of hospitality demand, said Robin Bew, editorial director and chief economist with the Economist Intelligence Unit.
“GDP only grew at 7.7%; what a terrible disaster,” Bew joked.
Bew said the Chinese economy seems to be improving, and the growth story this year will be better than in 2012. However, the best is yet to come, he said.
“Chinese consumers are more able to support economic growth,” he said.
W Hotels debuts in mainland China
The W Guangzhou has opened as the first W Hotel in mainland China.
It is the 44th W Hotel globally and marks a rapid Asian expansion for the W brand, which has plans to more than double its current footprint of nine hotels to nearly 20 over the next five years.
The 317-room W Guangzhou is situated in the city's Pearl River New Town District and was developed and will be owned by KWG Property Holdings.
China hotel leaders discuss future strategies
Hotel leaders in China are adapting their strategies to compete in a rapidly changing environment, a number of them said last week during HVS’s ninth annual CHIC in Shanghai.
Keith Barr, CEO of the greater China region for InterContinental Hotels Group, was the most outspoken about the necessity to adapt the hospitality business model in the Asia/Pacific region. Barr said owners and developers must learn to build smarter hotels if they want to continue seeing prosperous returns in China. Today’s hotels are not sustainable, he said.
“I think the industry needs to work with developers and the government on what sustainable development looks like,” Barr said. “We have to work with consultants and owners to future-proof this industry. We have to reengineer hotels to set owners up for better returns.”
Simon Cooper, president and managing director of the Asia/Pacific region for Marriott International, said he agreed with the concept of “building better boxes that are more efficient.”
However, “it’s a tough sell because no owner wants to do anything less than what the owners across the street are doing,” he said.
First Hilton Garden Inn in Southeast Asia opens
The 11-story, 86-room Hilton Garden Inn Hanoi has opened in Southeast Asia representing Hilton Worldwide’s second property in Vietnam.
The hotel is owned by Hoan Kiem Tourism & Trading Company Limited and managed by Hilton Worldwide. Located near the intersection of Phan Chu Trinh and Tran Hung Dao streets, Hilton Garden Inn Hanoi occupies a premium location in the business, cultural and leisure center of the city.
Social media’s complex web in Asia/Pacific
While the likes of Facebook and Twitter dominate the social media spotlight in the U.S., Europe and even the Middle East, hoteliers are navigating a much more complex—and crucial—landscape in the Asia/Pacific region, writes HotelNewsNow.com Contributor Elly Earls.
Leisure travelers in the region are more likely to use social media for travel inspiration and to seek out advice on hotels, according to a report.
Nearly half (44%) of leisure travelers in the Asia/Pacific made use of social media platforms for advice and inspiration regarding travel destinations, more than double the percentage who did so in the U.S. and the Europe, Middle East and Africa region, according to Text100’s “Digital Index: Travel & Tourism” study, conducted in October 2012. More than one-third of those also drew on information from social media to get ideas on where to stay.
The platforms they used varied considerably, given the region’s web of local platforms such as Sina Weibo and Renren in China and Cyworld in South Korea.
“While Facebook, Foursquare and other leading platforms are great for engaging international guests, you can’t discount the value of engaging with in-country guests who may stay at the hotel through local platforms,” said Marc Ha, VP and managing consultant at communications firm Text100 Singapore.
China's GDP growth slows to 7.7%
China's economic growth slowed unexpectedly in the first quarter, raising concerns that a recovery that started in the second half of last year is already losing steam, according to the Wall Street Journal.
GDP grew 7.7% on a year-to-year basis in the first quarter, down from 7.9% in the fourth quarter of 2012 and lower than many economists forecast, according to Chinese official data. The median GDP forecast of 14 analysts polled by The Wall Street Journal was 8%.
With the recovery in the U.S. economy still weak, and problems in Cyprus underscoring Europe's lingering debt issues, disappointing growth in China could cast a pall over the global investment outlook.
Compiled by Jason Q. Freed.