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Hotel owners are expected to revitalise their assets in the wake of growing regional competition.
The Asia Pacific region is on track to benefit from an investment bonanza as “forward-thinking” hotel owners seek to either reposition or reinvest in stalling properties, according to the Hospitality Asset Managers Association (HAMA).
A key reason for owners looking to revitalise their assets is due to the sheer volume of new rooms currently in the construction or planning stages, leading to stagnant occupancy and RevPAR figures. According to global hotel data house STR Global, there are a staggering 700,000-plus rooms either being built or on the drawing board across Asia Pacific – providing a healthy ongoing supply chain but putting pressure on occupancies and rates.
A number of issues face the region. Changing consumer habits, such as the growing trend towards more authentic destination experiences outside of established cities was leading to many Asian hotels having disappointing peak seasons. Further, poorly considered and developed projects were also seeing many resorts in areas incorrectly deemed to be ‘emerging’ to fail.
HAMA President and Managing Director of Tourism Solutions International, Eric Levy, said hotel owners can take action before the market does by repositioning properties for a wider market appeal or even converting assets to other uses. This, combined with opportunities to purchase other underperforming assets can lead to great levels of investment in the APAC region.
The rise of asset management companies was being fuelled by more hotel owners engaging their services to help turn around flailing properties, Levy added. This boom was also due to younger generations taking control of asset-rich family companies and needing expert guidance and higher levels of professionalism to maintain growth projections.
“Owners and importantly lenders are quickly understanding the value of dedicated asset managers, and adopting or demanding them,” HAMA board member Douglas Louden added.
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