HotelsExperts wouldn't rule out a return to normalcy this year, as Asian hotel markets are in a much better place than in 2021.

More doors open to recovery for hospitality in 2022

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In STR’s Asia-Pacific hotel performance analysis, experts forecast that the industry will achieve a sense of normalcy by year end.
In STR’s Asia-Pacific hotel performance analysis, experts forecast that the industry will achieve a sense of normalcy by year end. Photo Credit: Gettyimages/Boyloso

If 2020 and 2021 were a test of the industry’s mettle, then 2022 will be the year that the hospitality sector proves its ability to recover stronger than ever, according to hospitality analytics firm STR. 

“We feel that many markets will return back to normal by the end of 2022,” Jesper Palmqvist, area director of Asia Pacific at STR shares. “There are more markets that we thought last year that actually would be able to do it, and the reasons for that would be that markets are in a better place now with vaccinations, and that governments are now more progressive and faster in changing decisions.”

With hotel rates, STR forecasts that the luxury segment will continue driving the pricing momentum. And while cost inflation may present a challenge, it could be offset with Average Daily Rate (ADR) growth and implementing efficiencies in hotel management.

Palmqvist says that in terms of leisure travel, a sustainable way of reducing restrictions will drive its growth, while when it comes to business travel, based on current economic recovery, the demand is expected to be stronger.

Occupancy rates are picking up across multiple destinations

Matthew Burke, regional manager, Pacific of STR references the travel demand in Australia which rose back up to 2019 levels towards the end of January 2022. “Regardless of where the demand is going to end up, there’s an appetite to travel, and people want to travel, and people are prepared to pay for it,” Burke says.

Towards end-2021, STR also notes an increase in occupancy rates for Bali, Langkawi, Cebu Area, Phuket and Phu Quoc. However, compared to 2020, Bali’s occupancy rate dipped in 2021, while other areas grew substantially following the Delta variant in the previous year. Palmqvist believes that this could be due to Bali’s strong reliance on international demand.

“The more domestic orientation you have, the better the recovery is,” Burke shares his views derived from a study conducted by Tourism Economics which showed that domestic demand for travel correlates with international demand.

Destinations also have a thing or two to learn from Maldives’ reopening in July 2020, opines Burke. Maldives was one of the first few countries to reopen during the pandemic with several restrictions in place, and those restrictions have been mostly lifted in current times.

We feel that many markets will return back to normal by the end of 2022.– Jesper Palmqvist, STR

Given the longer lead time that Maldives had above other destinations with its reopening and the country offering a chance for “Europeans to get out of their restricted areas or the cold” in end-2021, Burke noted that “Maldives is one of the highest average rate destinations we track around the world, and is one of the few destinations we can say that consistently outperforms 2019 levels through the last three months’ performance.”

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