Given the events of 2003, many Asian hoteliers will no doubt be pleased that the year is nearly over…
Given the events of 2003, many Asian hoteliers will no doubt be pleased that the year is nearly over. With each year seeming to bring yet more unprecedented challenges for the hotel industry, 2003 has been no exception – the war in Iraq, the outbreak of SARS, the bombing of the JW Marriott Jakarta and continued challenging global economic conditions, to name but a few.
Since March and the outbreak of SARS, Asia has posted consecutive revenue per available room (revPAR) declines each month compared to the previous year. However, latest figures from the HotelBenchmark Survey by Deloitte show that over the last couple of months there has been a gradual improvement. September and October have both shown positive revPAR growth of 0.9 percent and 4.4 percent respectively.
Despite hotel performance for the region appearing to at last be moving in the right direction, this does not detract from the fact that year-to-October 2003 figures show that the majority of markets are still posting double-digit revPAR declines, compared to the same period in 2002.
Of the 27 markets tracked across Asia only two markets, Nanjing and Surabaya have experienced any growth in revPAR this year, of 0.3 percent and 6.9 percent respectively. At the other end of the spectrum, markets posting the largest declines year-to-October 2003 include Bali, which has seen revPAR fall by 47 percent, Beijing and Xian which have reported revPAR declines in excess of 30 percent and Singapore and Hong Kong both of which have reported declines of around 25 percent respectively. It will come as no surprise, that with the exception of Bali, these declines have been predominately driven by falling occupancy levels, due to dwindling visitor numbers to these markets during the SARS crisis. Currently occupancy levels for all these markets are resting just below the 60 percent mark.
Despite relatively gloomy year-to-date numbers, hotel performance for Asia does at least look to be moving in the right direction. However, it is still early days, and in these increasingly uncertain times who knows what 2004 will bring.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.