Despite some of the gloomiest predictions done both by the travel and tourism industry experts and pundits alike, the novel coronavirus has not brought the world to a standstill. Apart from clear winners such as Zoom and a myriad of food delivery services, the hospitality sector’s performance, though heavily and negatively impacted, was not disastrous – at least not in some regions and regarding specific areas of performance.
As such, the construction pipeline in Asia Pacific, excluding China, positively surprised industry players, closing the third quarter 2020 at 1,820 projects/385,194 rooms – up 2% in terms of projects and down 1% by the total inventory YOY. Such a success is mainly predicated by a relatively effective and efficient response of the APAC region to the coronavirus threat and by the positive long-term prospects the area offers to the current and future investors and developers. According to a recent report by Lodging Econometrics, Asia, excluding China, boasted 97 new hotels (20,587 rooms) in Q3 2020, which represents a 44% opening increase over the previous quarter. Moreover, 392 projects are scheduled to start construction in the next 12 months, which would eventually release almost 80,000 rooms into the market. Nevertheless, the ultimate success of the hospitality industry will depend on whether the demand is able to catch up with such a growth in inventory.
In terms of geography, Indonesia landed the first spot by the size of the pipeline with 346 new projects, followed by India (252/34,100), Japan (186/34,192), Australia (174/32,456) and Vietnam (165/62,052). As to the brands, the top franchises placing their bets on conquering APAC (excluding China) are Marriott International (278/60,002), AccorHotels (218/46,309), InterContinental Hotels Group (159/33,665), and Hilton Worldwide (99/22,636). Successful mitigation of the coronavirus emergency – both in the region and internationally – will impact the success of these projects greatly, but one thing is clear: despite the adversity, the hospitality industry is not going anywhere and might just rise from the ashes stronger than ever.
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