Skift Take
A less unsung story than China's growth is how the pandemic has made the rest of Asia-Pacific a gold mine for chains. Opportunities for conversions and franchising appear at their strongest ever. But the best thing? Owners with a new mindset.
The four biggest international hotel chains in Asia-Pacific in 2019 opened a combined total of more than 300 hotels and signed more than 500 hotels in the region in the pandemic-hit year 2020.
The number for the chains, which had been enjoying three years of a great development pace in Asia-Pacific, were expected to be higher, of course. But the gains in 2020 were nothing less than impressive given the historic challenges (see chart).
A horrifying year had turned out to be more resilient than expected, a validation that Asia-Pacific will remain the fastest-growing hotel region of the world by any measure.
And 2021 is already looking good. Hilton, which had record openings of 79 hotels last year, opened 15 hotels in Asia-Pacific in January 2021 alone.
“It's almost a dichotomy,” said Alan Watts, Hilton's president for Asia-Pacific. “While trading returns have been depressed over the Covid period, openings and signings have kept the pace. What it means is investors in general see it as a ‘pause’ in trading returns rather than a disruption.”
More Openings
The top four chains are confident of opening more than 100 hotels each this year as projects that were delayed or postponed in 2020 are carried forward, and vaccine roll-out is a real shot in the arm for owners.
Last year's openings were driven by investors noting the strong rise of domestic travel in Asia-Pacific and having a longer-term faith in recovery due to infallible evidence of pent-up travel demand. Openings were largely in countries where local demand had returned such as China, Japan, Australia, Indonesia, Thailand, and Vietnam, even if there were virus flare-ups.
Contrary to the sense that it's all mostly driven by China, openings were across the region. Of 75 hotels that Marriott opened last year, more than half (39 hotels) were outside China, in particular Japan where it added 20 hotels. “In the next couple of months we'll end up as the largest international hotel operator in Japan. We're going to open 11 more hotels this year in Japan,” said Rajeev Menon, Marriott's president for Asia-Pacific.
Admittedly, much of that development was planned way out in anticipation of the ill-fated Tokyo Olympics. “But it's not as if the development process has slowed down. The fundamenta
