According to research by JLL, investors are confident in the long-term future of the Asia- Pacific hotels market – despite ongoing COVID-19 pressure on the tourism and hospitality sectors. Of the approximately 100 investors surveyed for JLL’s Hotel Investment Outlook report, about 70 per cent say they are bullish on the Asia-Pacific hotel market and are interested in deploying capital into the sector in 2021.
“Asia Pacific is a powerful growth engine,” agrees Paul Foskey, Chief Development Officer, Marriott International, Asia Pacific. “According to the World Economic Forum, by 2030, the region is expected to contribute to roughly 60 per cent of global growth.”
The report shows Japan (52 per cent) and Southeast Asia (46 per cent) as the most-desirable hotel investment markets in the region, thanks to strong demand dynamics and positive long-term fundamentals. Australia (31 per cent) and China (22 per cent) favorably are also drawing strong investor interest.
According to U.S.-based McKinsey & Company, Asia is home to half of the world’s 3.2-billion middle-class population and will account for almost 39 per cent of global consumption by 2030. This represents an immense opportunity for the future of travel and presents a very appealing market when it comes to hotel investment., CEO and global co-founder of Valor Hospitality Partners – a full-service hotel-management, acquisition and development company that manages more than 40 hotel properties around the word, says the Asia-Pacific region has become an emerging market for hotel franchises.
“We’re particularly focused on two main areas. The first is New Zealand and Australia as we see franchising becoming very important in the region,” he says. “Typically, the brands have managed themselves, but post COVID-19 we see owners looking towards franchising and the flexibility and emotional connection with the operator that brings, [so we’re] currently reviewing options to set up an office there.”
The company already has a presence in Singapore and continues to see great opportunity in that market.
Opportunities abound for Marriott as well – despite 2020 being “the toughest year the hospitality industry has ever seen,” says Foskey. “We’re pleased with the new project signings we achieved across the region during the year and are grateful to our owners and franchisees for their belief in the resiliency of travel and the strength of Marriott’s portfolio of brands.”
The company’s key strength in the region, says Foskey, has consistently been in the upper-upscale and luxury sectors, and that continues to be the case. “We have a large lead over our competitors in both of these segments. However, the market is evolving, and upscale and upper-midscale hotels are driving an increasing higher percentage of the annual deal portfolio,” he says, adding Marriott has seen very strong growth for Courtyard by Marriott, Four Points by Sheraton, Moxy Hotels and Fairfield by Marriott brands, with more than 220 hotels now in the development pipeline. “This year, we’ll see the debut of the Moxy brand in Mainland China with the much-anticipated opening of Moxy Shanghai Hongqiao, while Fairfield by Marriott is rapidly expanding its footprint in countries all across the continent.”
He points to Marriott’s multi-phased ‘Michi-no-eki’ project in Japan, which allows travellers to access undiscovered destinations across the country, as an example of successful investment in the region. The project now has eight open hotels and 20 in the signed pipeline. “We expect to grow that pipeline further in the coming years.”
Conversions are also key for the company’s Asia-Pacific development strategy. “Conversion hotels allows owners to plug and play into the Marriott system at a much quicker pace compared to opening a brand-new hotel. We provide the brands, tools and resources for owners to succeed. We most recently opened The Duxton under the Autograph Collection brand in Singapore,” he says.
Both Foskey and McGlashan say they remain confident in the resilience of travel and, by association, the appetite for hotel investment in the region.
“In 2021, we’ll continue to expand our portfolio and expect to open 100 properties in Asia Pacific,” says Foskey. “China continues to lead global recovery and [Marriott] recently celebrated the opening of [its] 400th hotel in China and 50th hotel in Shanghai with the opening of JW Marriott Shanghai Fengxian.”
Marriott continues to strengthen its footprint with several brand debuts across Asia-Pacific in 2021. It debuted its W brand in Japan (W Osaka) and expects to launch brands such as The Luxury Collection in Australia and The Ritz-Carlton in Maldives.
“Our development pipeline is a testament to the confidence owners and the franchisee community have in Asia Pacific and in Marriott International’s long-term vision,” says Foskey.