Sydney Hotel Market Races to 2019 Finish Line, Others Get Going
Among key hotel markets in Asia-Pacific, Sydney’s gross operating profit per available room (GOPPAR) is closest to 2019 levels, according to STR’s April 2022 P&L data release. Photo by Dan Freeman on Unsplash
3 June 2022
Recovery of Asia-Pacific’s key hotel markets is uneven. The good news is the needle is moving, although there are risks to note, says data expert Jesper Palmqvist, STR’s area director Asia-Pacific
AUSTRALIA
Among key hotel markets in Asia-Pacific, Sydney’s gross operating profit per available room (GOPPAR) is closest to 2019 levels, according to STR’s April 2022 P&L data release.
Sydney posted a GOPPAR of $52 in April, 82 percent of the pre-pandemic comparable. Just the month before, its GOPPAR was 51 percent of 2019 levels.
INDIA
India’s recovery is coming from many places, starting with leisure destinations (see article: Benchmarking Against 2019 is a “low” bar). Since the past year, business travel and groups are driving recovery. Large meetings and weddings are already ahead of 2019. Big cities are also doing well, with strong midweek occupancies.
India has been progressive in removing restrictions in the last 12 months, allowing travel and business to resume.
INDONESIA
Indonesia has been one of the strongest markets throughout the pandemic, with fewer restrictions and a big domestic market. It really only dipped during the worst Delta period, otherwise it’s one of few countries with decent midweek business in the darkest of times. And now, with few restrictions left, Indonesia continues to show high demand numbers, even if ADR is still a bit soft.
SINGAPORE
Singapore is moving in the right direction. As a result, the forecast for its recovery has been upgraded, with 2019 levels expected by the end of 2024.
We noted a risk for the second quarter as SHN (Stay Home Notice, Singapore’s quarantine business) dropped, but it was saved by high ADR levels and arguably limited and expensive flights around the region as AirAsia and Scoot rebooted.
The MICE on the books is looking good, but seeing is believing.
(Singapore Tourism Board says the city hosted 150 events with 37,000 delegates in the first three months. In 2021, it hosted 200 events with 49,000 delegates. Singapore has secured at least 66 international events for the rest of 2022 as of now.)
Singapore posted an April GOPPAR of $46. This was 54 percent of the pre-pandemic comparable. In the month before it was 37 percent of 2019’s levels.
CHINA
China has many stories. Chongqing, Chengdu and Shenzhen are some examples of markets that are performing quite well, compared with Tier 1 cities which are challenged by lockdowns year-to-date.
Beijing was the only key market in Asia-Pacific to show lower profitability from the prior month.
Get Going Markets
JAPAN, VIETNAM
Japan and Vietnam are two good examples of markets that are about to get going. They were restricted for so long, to some degree still are, and are behind.
THAILAND
Thailand is just slightly ahead of them – central Bangkok is starting to move but is not there yet. Bangkok’s GOPPAR was 27 percent of 2019’s level in April, compared with 13 percent in March.
HONG KONG
While improved, Hong Kong’s GOPPAR remained in negative territory for a fourth straight month.
Risks to Watch out for
– China’s commitment to ‘dynamic zero-tolerance’ policy limits both domestic and outbound with uncertain time frames. Remember that Tier 1 is also an important source market domestically.
First quarter 2023 seems the earliest for volume China outbound to take off. The just-announced domestic stimulus package is a sign that recovery measures are needed.
– Airlift growth is volatile in 2022. Demand is much higher than supply. Part of airlines’ fleet is still grounded, and lack of human resources is a big challenge. Jet fuel prices are at their highest levels since 2008. This leads to higher airfares, especially from those airlines that are not hedged against against jet fuel prices.
– Inflation is a global challenge, and even if it is likely to peak this year and Asia broadly is less affected than Western economies, the effect of high global inflation carries with it longterm economical implications.
– Potential supply pressure as many new hotels are planned to open in 2022-2023
– Staff shortage in any sector of travel & tourism