In CBRE Research’s latest Hotel Megatrends viewpoint, the consultancy noted that hotel performance has been losing momentum in the Asia Pacific region, but an increase in Chinese tourists could help the sector rebound.
The Asia Pacific tourism sector continues to grow as a growing middle-class and rising household incomes have allowed for more people to take overseas trips. The report noted that intra-regional tourism is forecast to grow by 286.3 million trips by 2020. Additionally, the United Nations World Tourism Organization estimates the region will welcome 355 million international tourists in 2020.
However, hotel performance has not matched tourism growth and properties in the traditional full service hotel segment are struggling to balance price premiums with high fixed costs. Chinese tourists are not overly price sensitive towards accommodation, according to CBRE and this could be good news for hotels across the Asia Pacific region.
“Chinese tourists are most concerned about the comfort, star rating and facilities offered by hotels, along with the hotel’s reputation and recommendations by friends and family or from travel sites,” Robert McIntosh, executive director at CBRE Hotels, Asia Pacific, explained. “Cultural and language barriers, such as Mandarin speaking staff, signs and literature was also seen as important and Chinese travelers are increasingly demanding that hotels provide them with tailored services that better fit their culture, while helping them to overcome the language barrier.”
Thailand could be set to benefit as the country is the top destination for Chinese outbound tourists outside of Hong Kong with 71.7 percent y-o-y growth in this segment recorded last year.
“Chinese arrivals have continued to be Thailand’s largest feeder market making up 30 percent of tourist arrivals to Thailand, and accounted for 38 percent of total arrivals to Phuket,” James Pitchon, head of research & consulting, CBRE Thailand explained. “Hotel performance in both cities has continued to be driven mainly by strong Chinese arrivals with record high occupancy the first half of the year.”
