SPECIAL REPORT : 2014 FORECAST
ASIA PACIFIC
QUICK OVERVIEW : Generally , Asia Pacific is riding high . The region is still extremely attractive for both local and international flags . However , concerns about overbuilding might start to bubble closer to the surface , especially in China , where the focus is shifting away from luxury properties in gateway cities and toward midscale or budget offerings in second-tier locations . According to STR Global , there are close to half a million rooms in Asia ’ s pipeline as of September 2013 .
PERFORMANCE FORECAST : Most industry insiders are seeing a good year ahead in the region — the question is just how good . HVS notes that RevPAR was down year over year in the third quarter of 2013 for all major markets in China , which could be a cloud on the horizon going into 2014 .
HOT AND COLD SPOTS : “ The markets with highest occupancy are Tokyo , Hong Kong , Singapore , Sydney and Yangon , and they would also be most interesting for development as well as acquisition , as they are expected to remain strong markets ,” says Robert Hecker , managing director , Horwath HTL , Singapore .
Peter Borer , COO , The Peninsula Hotels , Hong Kong , sees potential in India for the luxury market . The Philippines are also an increasingly appealing development target with more than 30 % supply growth in the pipeline , according to STR Global . Hong Kong-based Shangri-La Hotels and Resorts still points to a Chinaheavy pipeline ( eight of the 15 hotels the company expects to open in 2014 are in mainland China ) for its view on what is hot . Dillip Rajakarier , CEO , Minor Hotel Group , Bangkok , says Indonesia , Vietnam and Cambodia are destinations to watch .
However , the development fever in Asia might be waning . Not all industry insiders are so hot on many of those markets . Hecker points out the pipeline is growing faster than most economies in the region can handle . His concern is that China and Indonesia are likely to fare the worst in that department . Plus , there are other markets he doesn ’ t think are likely to take off . “ Vietnam , India and Sri Lanka are each going through economic difficulties , which has put a bit of a damper on new development / financing ,” Hecker says .
STAR SECTORS : The days when Asia was a synonym for luxury are over . While there are still plenty of ultra-high-end hotels in the pipeline , much of the buzz now is outside the 7-star range . Especially in secondary and tertiary cities in China , the development landscape continues to shift toward midscale and budget . A growing challenge for international brands with their sights set on growth in China is that domestic players are beginning to rule the booming budget segment . Two of the current powerhouses are homegrown offerings such as 7 Days Inn and Jin Jiang Inn . Still , global companies like Accor , Marriott International and Wyndham are still making headway .
The Kempinski Hotel Yixing is the first international 5-star hotel in the city .
OPPORTUNITIES AND PITFALLS : Increasing outbound travel from China is the next hot trend , Rajakarier says .
Staffing will be one of the major issues . “ The biggest challenges are managing and staffing the number of hotel openings to levels needed for supporting brand standards and consistency , and for delivering results for owners whose expectations may not be in sync with market constraints and realities ,” Hecker says .
ONE- “ 2014 should be a good
LINER year . There are plenty of foreign investment fl ows churning around the region , relatively good political stability and increasing intra-regional trade . Intra-regional tourism also continues to grow , particularly China outbound .”
– ROBERT HECKER , HORWATH HTL
www . hotelsmag . com December 2013 HOTELS 25