Average hotel room rates in the Asia Pacific region fell in 2013, as over-supply issues impacted several key markets.
According to the full-year data from STR Global, Asia Pacific’s average daily rates (ADR) dropped 4.1%, from US$128 in 2012 to US$122 in 2013, while occupancy levels remained unchanged at 68.0%. This caused the region’s revenue per available room (revPAR) to fall 4.1% to US$83.
The decline in ADR was largely driven by hotels in India and China, where large amounts of new room supply in key cities impacted rates. In the Central & South Asia region, including India, ADR plunged 7.8% from US$140 to US$129, while in Northeast Asia, including China, rates fell 5.1% from US$112 to US$106. In Northeast Asia, this drop was compounded by a slight dip in occupancy levels.
“Hotel performance in Asia Pacific varied widely by country and market through a variety of reasons, including over-supply, regulatory challenges, political uncertainty, increased demand and financial resurgence,” explained Jesper Palmqvist, area director for Asia Pacific at STR Global.
“Apart from the continuing story that major Chinese hubs still have significant planned growth over existing supply, the pipeline has seen a shift with fewer projects in India and more in Indonesia, but also growth in smaller markets such as Sri Lanka.
“In terms of what’s due in 2014 by property class, there is growth in midscale projects, but majority of new openings will remain in the upscale and luxury segments,” he added.
The undoubted success story of 2013 was Southeast Asia, where surging tourist arrivals are driving demand for hotels. The region achieved ADR growth of 2.0% to US$140 and a 1.6% increase in occupancy, to 71.5% – the strongest levels of growth among any Asian region. In Oceania however, a 1.2% rise in occupancy was offset by a 4.5% drop in ADR, to US$168.
In terms of new development, STR Global reports that there are currently 2,022 hotels totalling 438,034 rooms being planned or developed across the Asia Pacific region. Approximately 590 of these hotels, comprising 120,710 rooms, are expected to open in 2014.
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