A recap of the first day of the Hotel Investment Conference Asia Pacific from Hong Kong with takeaways, quotables, photos and more highlights from the event.
HONG KONG—Asia’s current problems include the continued trade tensions between China and the U.S. and political turmoil in Hong Kong, but the area remains very attractive to hotel investment and development, according to sources at the 30th annual Hotel Investment Conference Asia Pacific.
Roy Melick, partner at law firm Baker McKenzie, predicted that by 2030, six new cities will grow to having more than 10 million people and of the 30 largest cities in the world, 19 will be in Asia.
Jesper Palmqvist, conference chair and area director, Asia/Pacific, at STR, the parent company of Hotel News Now, agreed that the outlook on the region isn’t all negative.
“There is a great deal of interest in growth and development in the (Asia/Pacific) area. ... It is not just doom and gloom for sure,” Palmqvist said.
Priyanka Kishore, head of India and Southeast Asia macro and investor services at Oxford Economics, said the China-U.S. trade war is the region’s key headwind and that tensions already have taken their toll on growth, although demand might continue unabated as Chinese and Indian tourists grow in number.
The clearest sign of “growth under pressure” is the global phenomenon of tourist numbers and hotel performance growth outpacing gross domestic product.
“There are certain worrying signals that there is a slowdown spreading to services, and consumer confidence is turning down,” Kishore said. “Markets are signaling recession. In the U.S., the yield curve has been flattening. … Increasingly threatening to turn persistent. Chinese officials are increasingly not interested in coming to an agreement with the U.S. This is all about China’s place in global trade in 15 years’ time.”
Among other destinations in Asia/Pacific, Vietnam is regarded as one the most attractive markets in terms of potential supply-chain relocations, speakers said.
Intra-APAC travel is likely to lead the way in the long run, however, with Chinese travelers still being the catalyst.
Robin Rossmann, managing director at STR, said Indonesia, Philippines, India, South Korea and Singapore are showing steady growth.
“Singapore is well-positioned, has absorbed its supply boom of recent years and is not overly dependent on China,” he said.
Rossman also gave a positive outlook on India, where on 10 October lawmakers passed legislation to reduce goods and services taxes on hotels.
“If you want to see the positive effect from a piece of government legislation, look no further than India … and the reason why the share price of Taj Hotels increased by 25% in one day,” Rossmann said.
Photo of the day
During the first day of HICAP, STR’s Robin Rossmann makes a rugby analogy for the hotel industry. (Photo: Terence Baker)
Quotes of the day
“Oyo (Hotels & Homes) could have five million hotels as there are that many around the world that are badly managed.”
—Suchad Chiaranussati, chairman of SC Capital Partners Group
“I have seen a rise of (requests for proposals) in every segment. We do not play in the economy space, but I would not be surprised to see it is there, too.”
—Jim Chu, global head of development, Hyatt Hotels Corporation
Tweet of the day
When you look at the increased hotel transaction activity in AsiaPac in last 6 years PLUS record levels of PE dry powder, suggests that investment yields are likely to remain low - per @JLLHotels @HICAPconference #HICAP pic.twitter.com/OzooJCM0Ew— Thomas Page (@TomPage_CMS) October 24, 2019