Rising tourism, investment activity driving Apac’s hotel sector outlook: CBRE

Kalynskye Adrian

/ EdgeProp Singapore

September 17, 2025 9:47 AM SGT

propertyeditor@edgeprop.sg

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Hotel average daily rates (ADRs) continued to rise across most Apac markets in 1H2025, albeit at slower rates compared to the past couple of years. (Photo: Albert Chua/The Edge Singapore)

Asia-Pacific’s (Apac) hospitality sector is still showing signs of growth, even as hotel performance is beginning to stabilise, says CBRE’s latest Asia Pacific Hotels & Hospitality Performance & Outlook report.

According to the report, hotel average daily rates (ADRs) continued to rise across most Apac markets in 1H2025, albeit at slower rates compared to the past couple of years following easing inflationary pressure. Japan saw the highest y-o-y change at 16.9%, followed by Korea at 6.3%.

Strong domestic tourism also helped propel higher ADRs in India, while Indonesian ADRs have risen in response to falling occupancy levels in Bali. On the other hand, Singapore ADRs fell y-o-y due to absorption of new supply, while Thailand ADRs were negatively impacted by the earthquake that occurred in March, as well as safety concerns among mainland China travellers.

At the same time, investors continued to show a strong appetite for hotel assets in Apac. CBRE’s report states that Apac hotel investment volume reached US$12.1 billion ($15.5 billion) in the first eight months of 2025, putting it on track to end the year close to last year’s US$16.3 billion, which set a new record high. Liquid markets backed by strong market fundamentals, including Japan, Korea, Australia and Singapore, continue to drive investment volume.

CBRE’s report highlights that Apac hotel supply remains constrained, particularly in the luxury segment. Citing data from CoStar, the firm notes that Apac has only 900 luxury hotels per billion population, much fewer than Europe (6,700) and the US (8,500).

Elevated construction costs are expected to continue weighing down on new supply, with CBRE predicting Apac hotel supply to achieve a compound annual growth rate of 2.3% between 2024 and 2028, down from the 5% recorded over the last decade.

While tourist arrivals in Apac have been on a recovery trajectory following the Covid-19 pandemic, CBRE observes that as of June 2025, only three markets in the region had surpassed pre-2020 tourist arrivals: Japan, Vietnam and Korea.

Nonetheless, Apac is poised to lead tourism growth, with the International Air Transport Association forecasting revenue passenger kilometres in the region to grow by 9% in 2025, the highest of any region globally.

As hotel performance continues to recover, Apac hotel operators are turning to real-time, demand-based pricing strategies that help them react quickly to demand changes during events or peak periods, says CBRE. Other strategies being employed include hyper-personalisation of guest experiences, expanding loyalty programmes and the use of AI to capture guest trends and implement smart room technology.

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Rising tourism, investment activity driving Apac’s hotel sector outlook: CBRE

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