Rising rates continue to boost Asian hotel sector

Rising rates continue to boost Asian hotel sector

The trend of rising rates continued to drive the Asia Pacific region’s hotel sector in September 2011. According to the latest data from STR Global, the region’s average daily rate (ADR) climbed 6.6% to US$140 last month. Occupancy remained relatively flat, creeping up 0.4% to 68.1%. This allowed revenue per available room (revPAR) to increase 7.1% year-on-year to US$95.

According to STR Global’s Managing Director, Elizabeth Randall, the region was boosted by New Zealand’s hosting of the Rugby World Cup, which commenced last month.

“New Zealand, which hosted the Rugby World Cup from 9 September to 23 October, reported the highest revPAR increase for the region,” Ms Randall said. “When analysing the daily performances for Wellington and Auckland, different travel patterns became apparent. For Wellington, travellers arrived largely on the nights of rugby matches for overnight stays but soon left the city to continue their journey around the islands. Meanwhile in Auckland, the pattern has been slightly different during the qualifying matches, with ADR growth starting the night prior to games for two consecutive nights, which has allowed hoteliers to benefit longer.”

Elsewhere in the region, Bangkok achieved the largest occupancy increase, rising 26.5% to 68.5%, as it continues to recover from the political unrest of 2010. It remains to be seen however, what effect the recent floods will have on the Thai capital’s hotels. Jakarta (+24.7% to 71.2%) and Kuala Lumpur (+21.7% to 77.0%) also saw strong occupancy gains.

When measured in US dollar terms, three markets reported ADR increases of 20% or more: Hong Kong (+23.5% to US$255), Osaka (+20.8% to US$142), and Jakarta (+20.0% to US$95). Three markets achieved revPAR increases of more than 25%: Jakarta (+49.6% to US$68), Bangkok (+34.1% to US$66), and Beijing (+25.7% to US$80).

Still suffering from its World Expo hangover and a sharp increase in hotel room supply, Shanghai recorded the most significant decline in occupancy, dropping 16.5% to 62.7%. New Delhi however, reported the largest drop in both ADR (-20.4% to US$152) and revPAR (-29.0% to US$95) last month. The Indian capital was hit by a terrorist bomb in September, but the ADR decline is reflective of a more long-term trend in the city, which has seen rates steadily decline from extremely high levels as more room supply is added to the city’s inventory.

Mark Elliott
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Mark Elliott
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