THE PIPELINE : ASIA PACIFIC
Mövenpick ’ s first island resort , Huma Island Palawan in the Philippines
Here is a country-by-country look at selected hotel development markets in the region .
AUSTRALIA
Australia ’ s hospitality market never saw the depths of the recession that most mature markets did , in large part due to a spike in business travel from China to the resourcesrich continent . Furthermore , China is now second only to New Zealand among inbound leisure visitors to Australia . “ Our corporate business has stayed very strong , especially in the capital cites , as well as Brisbane and Perth , which are benefiting from the mining boom ,” Issenberg says .
That has not translated into much new hotel inventory , but among Asia Pacific ’ s mature markets , Australia offers perhaps the biggest investment upside for existing assets . Australia ’ s major destinations — Sydney , Brisbane , Perth and Melbourne , along with popular leisure market the Gold Coast — are attractive hotel investment opportunities , says James McBride , the outgoing CEO of Kuala Lumpur-based YTL Hotels .
INDONESIA
After China and India , Indonesia is often cited by hotel executives as having the biggest opportunity in Asia Pacific . It is the world ’ s fourth-most populous country with an economy growing at 6 % annually , creating a traveler base that numbers approximately 120 million . The resort island of Bali is an established global leisure destination , but Indonesia ’ s other major islands — namely Java and Sumatra — are quickly gaining relevance .
Indonesia represents a buyer ’ s market for international brands , as chain penetration remains relatively low . Meanwhile , small niche domestic brands are popping up , often led by Western-educated Indonesians who are taking over family hotels and looking to branch out . Indonesia ’ s largest hotel company is
Jakarta-based Archipelago International , which operates more than 100 hotels under the Aston , Favehotel and Kamuela brands . Norbert Vas , Archipelago ’ s vice president of sales and marketing , says Indonesia ’ s burgeoning middle class offers opportunities similar to China ’ s — albeit on a more modest scale — with the greatest proportion of unmet hotel demand existing in the budget segment .
However , excitement over Indonesia ’ s market potential could be driving the hospitality market there toward a bubble , warns Rio Kondo , director of the Jakarta office of consultancy Horwath HTL . “ Some markets ( in Indonesia ) are looking at approaching oversupply by overzealous and inexperienced investors and developers , who are going into the markets that look great from the outside without knowing the inside and what ’ s coming ,” Kondo says .
JAPAN
The hotel industry in Japan still shows mild aftereffects of the 2010 tsunami disaster , but performance in the major cities is mostly back on track . STR anticipates double-digit RevPAR growth for Tokyo for full-year 2012 , driven mainly by improving ADR .
Development , however , remains slow . Quality greenfield sites are hard to come by in the major cities , and barriers to entry remain high . Moreover , the lease model still favored by many domestic developers does not match up with the overwhelming global trend toward management contracts .
The popular resort destination of Kyoto , which is expected to draw a whopping 40 million visitors this year , is seeing a bit of development activity , however . Berjaya Corp . announced plans for a 186-key Four Seasons-branded property in September , at a cost of US $ 318 million . A Ritz-Carlton project is also under development in Kyoto , targeting a 2014 opening .
MALAYSIA
Malaysia is among the prime beneficiaries of Asia Pacific ’ s airlift improvements , boasting a 17 % increase in air arrivals during the first half of 2012 year over year , according to C9 Hotelworks .
The country has great tourism and institutional infrastructures but a relatively small population of 28 million . Malaysia ’ s sovereign wealth fund , Khazanah Nasional Bhd ., this year announced development of a major golf resort in the sleepy beach town of Desaru . The project will have two hotels , including a Sheraton , plus a championship golf course , theme park and convention center .
Malaysia ’ s development appeal stems from its popularity as a Muslim destination . A recent study by marketing research firm DinarStandard found that Malaysia ranks as the top destination for Muslim tourists .
MONGOLIA
Those monitoring Mongolia say it could become the next must-have destination . YTL ’ s McBride compares the opportunity in Mongolia ’ s largest city , Ulaanbaatar , to that offered by New Delhi a decade ago , albeit on a much smaller scale .
Only a handful of internationally branded hotels are open in Mongolia , including a Kempinski and a Ramada in Ulaanbaatar . Hyatt Hotels Corp . will make its Mongolia debut in 2014 with a pair of Hyatt Regency-branded properties in Ulaanbaatar . Holding back Mongolia ’ s potential is the lack of transparency in its investment markets ; JLLH ranks Mongolia near the bottom of its 2012 transparency index , placing it among the likes of Venezuela , Iraq , Pakistan and Sudan .
MYANMAR
The country formerly known as Burma is finally opening up to foreign business and tourism after
34 HOTELS December 2012 www . hotelsmag . com