In this week’s roundup of news from the Asia/Pacific region: effects of the coronavirus; STR pipeline 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.
Hotel executives on the business impact of coronavirus
During their fourth-quarter and full-year 2019 earnings calls, executives at publicly traded hotel companies spoke about the ongoing effects the coronavirus (COVID-19) has had on hotel performance in China and their concerns about future disruption of travel. In this roundup, read what CEOs told analysts about how they’re handling the health crisis.
STR: Chinese hotels recovered quickly following SARS
In a review of historical data, STR, the parent company of HNN, found the Chinese hotel industry recovered quickly after SARS was contained in 2003.
“Significant market, economic and social changes over the past two decades render a direct comparison of coronavirus to SARS rather complex when it comes to hotel performance,” said Jesper Palmqvist, STR’s area director for the Asia Pacific region. “However, we felt it important to analyze hotel performance and recovery in China during the early part of the millennium in order to derive possible projections for 2020. All areas of the country, which likely differed in terms of number of reported cases, suffered a negative impact during the SARS outbreak. Some recovered quicker than others, but all bounced back swiftly after containment.
STR: Asia/Pacific hotel construction up 14.1%
Hotel pipeline data for the end of January 2020 of the Asia/Pacific region showed 2,021 projects representing 441,819 rooms in construction, according to STR. That amounts to a 14.1% year-over-year increase in the number of rooms in the final phase of development. Hotels in the upper-midscale segment represented the largest percentage year-over-year increase in activity at 24.4%.
In the region, six countries reported having more than 20,000 rooms under construction. China topped the list with 224,579 rooms, followed by Japan with 35,622 rooms.
Chinese hotels seeing steep declines from coronavirus
The first data out of Chinese hotels related to COVID-19 collected by STR show occupancy dropping from 70% on 14 January to 17% on 26 January, reports HNN’s Terence Baker.
Analysts for STR said preliminary data for 23-26 January shows a 71% year-over-year drop in occupancy as well as a 10% increase in average daily rate, Baker reports. Analysts also said the low performance is due to the “escalation of the outbreak and partially and depending on product type and location—to the combination of Chinese New Year.”
Deals and developments
- India’s bankruptcy court gave Blackstone Group approval to acquire the 324-room Trident Hotel in Hyderabad for 5.85 billion Indian rupees ($81.4 million).
- Thailand’s Minor Hotels acquired the 108-key Gold Tower for an undisclosed amount.
- Berjaya Hotels & Resorts will start a 15 million Malaysian ringgit ($3.5 million) renovation of the 650-key Berjaya Times Square Hotel Kuala Lumpur.
- Singapore’s UOL Group has entered into an agreement to purchase the 154-room hotel in Jakarta that is currently under construction from PT Success Venture Hotel Investments for 67.5 million Singapore dollars ($50 million).
- The NSW Government Independent Planning Commission gave the 509-room InterContinental Sydney permission to undergo a 203 million Australian dollar ($134.3 million) renovation.
Compiled by Bryan Wroten.