Asian hotels’ room occupancy to lag ADR: Colliers

Note, however, that most hotels are already achieving pre-COVID rates. 

Professional services and investment management firm Colliers expects 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.

“[This is likely to happen] 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,” said Govinda Singh, Colliers’ Executive Director, Valuation & Advisory Services, Asia.

Here’s more from Colliers:

Room occupancy is expected to lag 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, strategizing 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 optimize 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 incentivized 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.

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.