Slight improvement in Asia Pacific hotel performance in 3Q2020: Colliers International

SINGAPORE (EDGEPROP) - While the global economic outlook is expected to remain subdued in the near future due to Covid-19 risks, there is a slight improvement in Asia Pacific hotel performance in 3Q2020, according to Colliers International’s quarterly digest report Hotel Insights Q42020.

According to the report, the most liquid markets in 3Q2020 were South Korea, China, and Taiwan, while markets such as Japan, Hong Kong, Singapore and India saw little investment sales during the quarter.

However, it expects that investment activity will gain pace in the coming months. Markets that have large domestic investment bases standing an advantage. Significant pricing adjustments will make listed entities prime targets for merger and acquisition.

Govinda Singh, executive director, head of hotels & leisure, Asia, says that the availability of a Covid-19 vaccine by the end of 1Q2021, combined with contact tracing systems, could allow the travel economy to return to at least 70% starting from mid-2021.

“We remain confident that the hospitality industry will rebound sharply when international travel (without quarantine) returns, given the industry’s legacy of resilience and agility,” he adds.

Already, travel is slowly resuming in Australia as state borders reopen. Hobart, the capital of the Australian island state Tasmania, saw hotel bookings surge 40% in October. By the end of October, it had reached 65% of 2019’s level. It is expected to grow through November ahead of the peak tourism season in Tasmania. Melbourne, Sydney and Brisbane also showed pickups in bookings. The country's good management of Covid-19 and size of the domestic tourism market will result in opportunities for investors in the medium to long term, according to the report.

Maldives has also reopened its borders in July, with 94% of its hotels and resorts reopened by the end of October. Colliers expect that investment demand will remain healthy in Maldives.

As from cruises, bookings are still suspended in Asia, but Singapore Tourism Board has launched “cruise to nowhere” sailings departing from Singapore. Genting Cruises is also proposing the implementation of “cruise bubbles” within selected regions. Colliers expect that the deep decline will continue through 2020 as a result of Covid-19 fears, followed by a U-shaped recovery by late 2021.