STR area director in the Asia Pacific Jesper Palmqvist cited the way hospitality and the related investment scene in the region are shifting in the face of current circumstances during his session at the South East Asia Hotel Investors’ Summit (SEAHIS) in Bangkok on Monday, 15th June.
Palmqvist presented attendees with a by-the-numbers breakdown of regional development, emphasising APAC’s resilience which has helped deliver stronger rate growth than anywhere else in the world.
He declared: "Demand across the world has slowed down, and so also in Asia Pacific. But we still get more rate growth here than in most parts of the world; we’re in that part of the cycle where we’re not releasing too many rooms into the market."
Don’t look at Asia through a single lens
Per the STR report, the overall outlook for the remainder of the year points to decent year-over-year growth, tapering into lower, single-digit growth toward the end of the decade.
Nevertheless, Palmqvist advised against looking at Asia through a single lense; rather, stakeholders need to pore deep into pockets of supply and demand.
Consider the case of Japan where structural changes are defining the market: Tokyo, in particular, has shifted its source mix, insulating itself against a shortfall driven by a 55 percent decrease in inbound travel from Mainland China.
Contrast this calculated insulation against the way western Japanese cities are feeling the crunch from the drop in arrivals as well as the decreased interest following the end of the 2025 Osaka Expo.
Palmqvist said: "The source shift so far here today means higher ADRs and longer length of stay... It’s not about new supply in Japan. It’s about repurposing."
Conversely, Western Japanese cities like Osaka are experiencing a "crunch," feeling the double whammy of fewer Chinese group travelers and tough comparisons against the previous year’s expo-driven performance.
Dealing with regional micro-markets
Palmqvist also highlighted the need for granular asset management, utilising key destination case studies from Thailand and Vietnam to illustrate how neighboring micro-markets experience wildly different operational realities.
In Bangkok, sub-markets are diverging sharply: Sukhumvit, in particular, continues to struggle compared to other parts of the Thai capital which have successfully recovered from the pandemic slump.
Palmqvist said of the district: "Sukhumvit continues to see that challenge to really get those peaks; that green line just doesn’t get what the other sub-markets here do.”
On the other hand, a number of lesser-known Thai destinations have marked three years of sustained and significant growth, including Phuket and Krabi.
Leisure markets, in particular, have safeguarded their gross operating profit per available room (GOPPAR) with mandates regarding seasonality management as well as protecting themselves against eroding F&B margins.
Meanwhile, over in Vietnam, there is a marked comparison between its two leading resort hubs Nha Trang and Phu Quoc.
In the former, there is a balanced historic international mix with stable yields and less volatility.
On the other hand, the latter is more reliant on domestic travelers which forces it to deal with extreme seasonal spikes; despite this, Phu Quoc’s peak-season performance rivals the absolute best in the region.
According to Palmqvist: "What's the difference between Phu Quoc and Phuket? Well, nothing; there is no difference in the last two years on peak season either. We’re having the same occupancy in peaks. Phu Quoc has come and already shown that. Can we compete in Southeast Asia? They can."
