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Sustained recovery in international travel expected to emerge in Asia in H2 2022

Outlook for hotels remains uneven, with H1 2022 a redux of 2021 before accelerating in H2 2022.

HONG KONG, 22 March 2022 – 
Leading diversified professional services and investment management company Colliers today released the Hospitality Insights Q1 2022 report, a quarterly digest of key trends in Asia’s hospitality sector.

Govinda Singh, Executive Director, Valuation & Advisory Services | Asia, commented: “We expect the first half of 2022 to be a redux of 2021; however, the second half of the year should see a sustained recovery in international travel starting to emerge, especially in destinations that accommodate quarantine-free travel and limit rapid testing.”

“Leisure will lead the recovery, followed by business and MICE groups, particularly in markets with strong domestic demand. China outbound, however, is some time away, which should hopefully encourage China-dependent markets to pivot towards a more sustainable operating model.”

Recovery in RevPAR will be led by ADR, with room occupancy lagging

Room occupancy is expected to lag average daily rates (ADR), although in many markets globally, hoteliers are already achieving pre-Covid rates. Supply and labour constraints have forced hoteliers to be firm on rates, strategising that those who want to travel and experience good service will be willing to pay. Government business is expected to taper off in the second half of the year, pushing transient rates rapidly back towards pre-Covid levels.

Asset management is the name of the game as hoteliers seek to optimise performance and service

Colliers recommends hoteliers develop more robust and resilient business models, to be flexible with ‘fixed’ costs and to identify how well they are optimizing their business activity.

Reassessing the operating hours of F&B facilities or whether unused space can be converted to alternative income-generating use will allow hoteliers to diversify their offering. The adoption of digitisation and technology, which was emerging pre-Covid, has become more important, especially as health and hygiene are at the forefront of travellers’ minds. Travellers going forward will also place more of a premium on space and ESG issues.

All of these trends will need to be considered in the near future, and talent will need to be further educated and incentivised to remain in the sector.

More competitive gaming environments expected to emerge as governments seek to expand revenue base

Previously, no one would have thought gaming would be topical in the Middle East and Thailand. Even Philippine offshore gaming operators (POGOs) are returning to the Philippines.

However, the industry will continue to face headwinds in the near term. With China’s continued drive to keep gaming within its confines and/or reduce its export of gaming guests, casino operators will be forced to relook at their business models to ensure they remain resilient. There remains growth in gross gaming revenues (GGR) across Asia as its GDP per capita continues to climb, but as China’s growth slows in the near term and governments take a stronger interest in regulating and taxing both landside and online gaming, the industry will need to adapt to remain resilient.

Japan has experienced continued delays in passing legislation on the six integrated resorts (IR) that were previously anticipated. Colliers believes there is an opportunity for at least two IRs in Japan and would have expected to see at least one from its Olympics legacy.

Nevertheless, the outlook for GGR in 2022 remains moderate, with recovery to pre-Covid levels not expected until 2025, with the top performing market expected to be Cambodia.

Download Colliers' Hospitality Insights | Q1 2022 here.


Media Contact:

Danielle Paterson