One of the most informative sessions at HICAP Singapore is usually provided by Jesper Palmqvist of STR Global who offers a quick fire summary of all the latest regional trends. In some cases the data support general perceptions – things really are tough in Korea – while in others the numbers reveal a rosier picture than might be generally imagined. Indeed, in a year when the news has presented a relentless series of threats to global stability, the realization that investment is up, performance is up, and Asia Pacific is leading the way may come as something of a surprise, but there is undoubtedly growth in travel and the outlook remains positive.
The first indicator for discussion was RevPAR growth, where the data initially make for alarming reading. Korea and Myanmar came in at −25%, Singapore, Indonesia and Malaysia at up to −20%, the Maldives at up to −10%, and China, India and the Philippines at up to −4%. Only Thailand, Japan, Vietnam and Sri Lanka were able to post figures in positive territory. The problem with this view, however, is that the data are all too often denominated in strengthening US dollars – and if we take a local currency view, the picture is quite different.
From the yen and baht perspective, Japan and Thailand posted RevPAR growth of almost 15% and 13% respectively. China’s growth was positive, along with that of the Philippines and India, and even the disastrous numbers mentioned earlier for the likes of Korea, Indonesia and Singapore, while still negative, are nowhere near as bad as first appearances might suggest.
Of the ASEAN nations, Thailand has overtaken Malaysia as the leader in terms of international visitor numbers, despite the continuing political and security troubles the country faces. Both Malaysia and Singapore, however, have seen arrivals stagnate or fall, and while other destinations across the region have continued their gradual upward trends, the rising star is clearly Indonesia, where rapid arrivals growth saw the ten million visitor barrier broken for the first time in 2015.
Of course, it is always instructive to consider ADR growth and occupancy growth in tandem; filling rooms is good, but better if it’s accomplished with rising rates. The general picture across the region is one of rates being pushed higher. In some cases, such as the Maldives, occupancy growth has been negative while ADR growth remained unchanged or even positive. One interesting point for the Maldives has been the shift in source markets as Chinese visitors take a growing interest. When visitor demographics change, length of stay can also be affected, having a knock-on effect on total visitor spending rates. Indonesia’s situation has been similar, with falling occupancy, but the country has been very successful in holding its rates. In contrast, Sri Lanka saw occupancy rise by around 8% while ADR fell by 3%. The performance of Mainland China, meanwhile, achieved a measure of stability with both ADR and occupancy unchanged over the previous twelve months.
In conclusion, China’s recovery is probably complete, and Thailand has moved beyond its recovery phase. Singapore’s performance has been flat, but the luxury sector has been its strength. Hong Kong’s performance continues to disappoint, with suggestions that it will be 2019 before 2012 levels are seen again. Kuala Lumpur is another major city to have suffered significant negative growth. Japan continues to excel in terms of occupancy, while Australia today would appear to offer the same high potential that Japan did around three years ago prior to its current boom.
Cautious optimism remains for Vietnam, with growing supply in the near future, and finally, while Myanmar has not had the best of years according to the data, and rapid supply growth will make it difficult to push rates at the moment, in the long run, the country can still be seen as an excellent bet