Hotels across the APAC region are showing a mixed but generally positive performance, with demand continuing to grow despite challenges such as rising supply, inflation, and fluctuating consumer spending.
Speaking at the HICAP Conversation webinar on 26 March 2025, Karan Mahesh, Senior Sales Manager for South & Southeast Asia at STR CoStar Group, led the ‘Hotel Performance and Outlook’ session.
This webinar is the first of three organised by the Hotel Investment Conference Asia Pacific (HICAP), offering attendees valuable insights into the hotel investment landscape and keeping industry professionals updated on current trends.
Here’s a look at how different countries are performing based on insights from HICAP webinar:
Japan, a popular destination for both business and leisure travellers, has experienced strong transaction volumes over the past year. Hotels in Japan saw significant ADR growth and positive occupancy rates in 2024, with Tokyo leading in GOPPAR (Gross Operating Profit Per Available Room) growth among top markets. However, while GOPPAR increased by 1.7 percentage points, labour costs continued to rise at a faster rate than revenues, up by 5.6 percentage points.
Singapore, which has acquired a reputation of being an expensive destination in recent years, is one of the few APAC destinations where ADR growth has been negative in 2024, which suggests that hotel rates are moderating. The city-state also boasts a healthy occupancy rate compared to the rest of APAC.
Vietnam is experiencing a surge in both international and domestic demand, resulting in high occupancy and positive ADR growth. This can be attributed to a long-awaited recovery, as tourism numbers in the country rise significantly. The recent opening of luxury hotels is expected to attract more high-end travellers, further boosting Vietnam’s appeal as a holiday destination.
China, meanwhile, is seeing negative growth in both ADR and occupancy due to several factors: increased supply, slowing consumer spending, and a rise in outbound travel. The oversupply of hotel establishments in the country has likely led to a drop in ADR as properties strive to remain competitive. As Chinese travel confidence picks up and more Chinese tourists head to international destinations, this could exert more downward pressure on the rates and occupancy of domestic hotels.
In countries such as Thailand, Indonesia, and Malaysia, robust demand drivers, increased flight capacity, rising international inbound travel, and the easing of visa restrictions have contributed to strong growth in ADR and occupancy rates. These destinations are also seeing growth in the upper mid-scale segment.