Total hotel investment in the Asia-Pacific region is expected to reach US$12.2 billion throughout 2024, supported by an influx of investment activity, a more favorable interest rate environment, and macro and microeconomic developments.
Jones Lang LaSalle reports that hotel investment in the Asia-Pacific region is expected to increase 4.3% throughout 2024 compared with 2023, totaling US$11.7 billion.
In the first nine months of 2024, the cumulative transaction volume reached US$9.05 billion, a year-on-year increase of 15% (US$7.87 billion in 2023), accounting for 90% of the transaction volume in 2019.
Cross-border investment has surged between September 2024 and now, driven by big-ticket deals in Asia, with Japan leading the way, while Australia saw a rare lull in annual activity.
JLL Hotels & Hospitality Group, CEO of Nihat Asia Pacific, said: “Broader economic factors, including a positive regional macroeconomic outlook, supportive interest rate policies and solid consumer factors, give us confidence that hotel investment will continue throughout the year. Easily better than last year.”
“Investors have been showing interest in investing more in Asia Pacific’s hospitality sector, and we see no signs of activity weakening in the final quarter of 2024, leading us to increase our investment forecast to $12.2 billion.”
Average daily room rates (ADR) in Asia Pacific are up 19% in local currency terms from the previous cyclical peak in 2018-2019, JLL said, “Given the strong offset from business travel, there is still room for occupancy in most markets rate increased to pre-pandemic highs.” Some people have cut back on leisure travel.”
JLL said: “At the same time, JLL believes that occupancy rates in the final period may take longer to recover, as MICE travel remains slower to recover and mainland China continues to face lingering challenges in the short term. economic issues, affecting overall industry performance.”
“JLL analysis suggests Australian sales will remain relatively subdued in 2024. Year-to-date transactions totaled $629 million (settled), down 38% on the same period last year.
“JLL expects total transaction volume for the full year should reach approximately $1.1 billion, below the long-term average but likely to be affected by the fact that many 2024 deals may also be classified as ‘last year’ deals.”
“Japan has further established its position as the region’s most attractive hotel market in the first nine months of 2024. Event sales through the end of September amounted to US$3.8 billion.
“With investor interest unlikely to wane, JLL expects total sales to reach $4.7 billion in 2024, rising 4% to $4.9 billion in 2025. Despite recent interest rate hikes and a slight appreciation of the yen, JLL expects Amount LaSalle expects investment in Japan’s hotel industry to remain active given strong supply and demand fundamentals.
As of the end of September 2024, the total investment in hotel space in mainland China was US$1.8 billion, an increase of 6.4% over the previous year. Shanghai and Beijing remain the most active hotel investment markets, accounting for more than 50% of the total transaction volume. “
Elkann said: “Since the first half of 2023, factors including currency fluctuations have helped attract foreign investors.
“Strong fundamentals for the region’s tourism industry since borders reopened for international travel are welcome and have also helped boost investor interest.
“While occupancy levels may ease in some markets in the short to medium term, the industry as a whole has entered a new phase, less driven by recovery and more tied to the idea of organic and sustainable growth ”
