In this week’s roundup of news from the Asia/Pacific region: STR’s weekly video on Chinese hotel performance; hoteliers’ concerns in the Asia/Pacific region; STR monthly data; and more.
Hotel News Now each week features a news roundup from a different region of the world. Today’s review covers the Asia/Pacific region.
Calendar shift softens China’s occupancy, ADR recovery
Higher-tier hotels in China are starting to catch up to those in lower chain scale segments as the rebounds in occupancy and average daily rate are slowing, reports HNN’s Dan Kubacki from the weekly STR video series from Jesper Palmqvist, area director of Asia/Pacific at STR, parent company of HNN. The reason for the slowing occupancy growth is due in part to a 2019 calendar shift of the Chinese Dragon Boat Festival on 7 June.
“We’ve now seen four weeks where occupancy is not growing as quickly as it did earlier, but if you look at occupancy recovery, which is now broad, as first-tier cities grew faster to even out the current position where many markets now sit only 20% to 25% behind last year’s levels at this time,” Palmqvist said. “But how can things improve and still not grow? The answer is that last year’s occupancy actually declined slightly during this time due to calendar shift in holidays. The Dragon Boat Festival in early June last year created reduced travel dates as people waited for the holiday and worked up until the festival.”
STR: Asia/Pacific hotel performance for May 2020
Hotels in the Asia/Pacific region reported monthly lows in the three key performance metrics during May 2020, according to data from STR. Occupancy dropped 47.3% to 35.8% while ADR fell 40.2% to $55.93, resulting in revenue per available room decreasing 68.5% to $20.04.
“The absolute levels in each of the three KPIs were the lowest for any May on record in the region, but were up from April levels,” the news release states.
APAC hoteliers worried about staffing, financing
Hoteliers in the Asia/Pacific region are facing several challenges during the coronavirus pandemic and its recovery, reports HNN’s Danielle Hess from the “HICAP 6x8 Recovery top of mind episode 2” online session hosted by the BHN Group.
“Cash is king” for hoteliers trying to stay afloat, and that’s not an easy task, said Choe Peng Sum, CEO of Pan Pacific Hotels Group.
“The management of cash flow, to have a positive cash flow … can make or break a company. Once the debt moratorium clears in about 60 days … you can see a lot of issues … especially with owning companies,” he said. “So we set up a war-room team made up of the best just to go through scenario planning, week after week going through to make sure we have the right financing done, the line of credit as well as a positive cash flow.”
Huazhu projects ‘swoosh’-shaped recovery
Despite a resurgence of COVID-19 cases in Beijing, executives at Shanghai-based Huazhu Group are expecting RevPAR to almost normalize by the end of 2020, reports HNN’s Sean McCracken from the company’s first-quarter earnings call.
Huazhu Co-President Jin Hui said year-to-date RevPAR levels are “back to 65%” of 2019’s levels, and that number could climb to roughly 84% by the fourth quarter.” Average occupancy at the company’s hotels are weighted heavily toward the economy and midscale segments and were exceeding industry averages in China.
“The resurgence of COVID-19 in Beijing did have a negative impact on our operations,” he said. “However, we’ve also seen the Chinese government take a very thoughtful, quick reaction to this situation, and therefore we are very cautiously optimistic.
Deals and developments
- Thailand’s food importing business Sino Pacific Trading Company Limited acquired the 206-room Vibe Hotel Melbourne from Australia-based developer Caydon Property Group. The acquisition price was not disclosed.
- Japan-based Daisho Development acquired the 294-room W Melbourne for an undisclosed price.
- Operators Tony De Marco and Theresa Albioli acquired the 43-room Bellinzona Resort in Daylesford, Victoria, in Australia for an undisclosed amount.
Compiled by Bryan Wroten.