The newly released JLL Hotel Operators’ Sentiment Survey 2024/2025 is forecasting mixed fortunes for the hotel sector across the Asia Pacific in the year ahead.
The annual survey is based on 1075 responses from hoteliers operating in the Asia Pacific region, including 225 from Australia, New Zealand, and the Pacific. The survey covered all sectors of the hotel market, from luxury to budget, and city to resort.
Overall, North, South, and Southeast Asian hoteliers are forecasting strong performance for 2024/2025. In contrast, the Australasia region is more cautious in its optimism.
The Survey’s main conclusions are:
- Occupancy – Australasia and Greater China anticipate a brighter year in 2025 than in 2024, yet they remain more cautious than the other subregions. 35% of Australian respondents warned of challenging conditions for the remainder of 2024, but sentiment regarding 2025 occupancies improved, with 68% predicting a better performance and only 12% predicting lower occupancies in 2025.
- ADR – In line with sentiment in Occupancy, more respondents from Australasia and Greater China expect a decrease Y-o-Y in ADR in 2024 and 2025 than in other parts of the region.
- Sentiment for more positive occupancy and ADR growth is highest at the two extremes of the market, with 79% of hoteliers in the luxe sector, and 82% of budget hoteliers, expressing positive sentiment about occupancy in 2024/25. Upper Upscale, Upscale and Midscale hoteliers are less optimistic about revenue, but Upscale hoteliers were the most bullish in terms of ADR growth.
- Total Revenue & Profit – Hotels in Japan, Thailand and India are most optimistic about the prospect of growth in revenue and profit results in 2024 and 2025, with slower growth anticipated in Australia and Southeast Asia. Hoteliers in China are predicting a general declining trend in 2024/25.
- F&B – Increased input costs and pressures on company and household budgets have led hoteliers across the region to be more circumspect about prospects for hotel F&B operations in 2024/25. 28% of respondents were pessimistic about growth prospects for F&B revenue, while 48% believed F&B profit would increase.
- 28% of Australian hoteliers forecast a potential decline in F&B revenues, and 32% believed F&B profit could fall. Chinese hoteliers were even more concerned about F&B revenues, with 69% less activity, whereas South Asia, the Maldives, and Southeast Asia were generally more optimistic.
- Human resources costs and retention remain major issues for hoteliers across Asia Pacific. 87% of hotels anticipate higher wage costs and identify that staff loss is primarily related to personnel being poached from within and outside the industry because of salaries being offered.
- The largest Capex items for 2024/25 are for technology and mechanical, electrical, and plant items, while sustainability is identified as third on the Capex list. According to the survey, the motivation for implementing sustainability is more to meet brand standards than to respond to guest demands, and hoteliers highlighted lack of funding as the number one challenge in setting or achieving environmental goals is the lack of funding for sustainability initiatives.
JLL Hotels & Hospitality Group Executive Vice President, Ross Beardsell, said that the survey was the most comprehensive insight into how hoteliers were viewing the year ahead, and with the level of economic and political uncertainty.
“In Australia, the pace of new hotel openings has begun to slow – except Brisbane, which is set to welcome some 1,000 new premium hotel rooms at the Queen’s Wharf precinct – but the expected resurgence in hotel demand is proving elusive, and that is reflected in the sentiment of Australian hoteliers surveyed,” said Mr Beardsell.
“The predictions are for a growing net deficit in international travel to Australia, with outbound holiday travellers surging, but inbound visitors still far from returning to 2019 levels.
“Inflationary pressure has begun to ease globally but remains too high for Australia’s Reserve Bank. However, previous concerns that this would lead to a hike in rates appear unlikely, especially given that the Reserve Bank of New Zealand lowered rates recently, almost a year ahead of its own projections. Input prices remain high for Australian and New Zealand hotels, and business and conference travel remain subdued.”
JLL Hotels & Hospitality Senior Associate, Joseph Sim, based in Singapore, said that the negative sentiment reflected in replies from Chinese hoteliers would have an impact on the whole region’s tourism and hospitality industry.
“The economic situation in China is causing a significant reduction in travel, both within the country and externally, which is reflected in the continued shortfall in Chinese outbound travel to countries such as Australia,” said Mr Sim.
“Whilst some countries have witnessed growth in international arrivals compared to 2019 levels, international demand is still recovering in most destinations. Yet, the prospects for revenue and profitability growth in 2025 are high. India’s outbound market will be one to watch in the coming years.
“The global situation remains very uncertain, which has led Marriott, Wyndham, and Hilton to suggest consumers may be pulling back on travel demand in the second half of 2024, and they have modestly lowered their full-year outlooks. IHG, on the other hand, remained cautiously optimistic, with the exception of China travel.”
About JLL
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.9 billion and operations in over 80 countries around the world, our more than 103,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
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