STR Reports Asia Pacific Hotel Results for December 2014

According to data compiled by STR Global, hotels in the Asia Pacific region experienced mixed results in the three key performance metrics during December 2014 when reported in U.S. dollars.

The region’s occupancy for December grew 0.7% to 67.0%; ADR dropped 5.3% to US$114.13; and RevPAR decreased 4.7% to US$76.52.

Highlights from key market performers for December 2014 in local currency (year-on-year comparisons):

- Two markets experienced double-digit occupancy increases: Hanoi, Vietnam (+22.2% to 75.5%), and Bangkok, Thailand (+14.5% to 77.5%).

- Jakarta, Indonesia, reported the only double-digit occupancy decrease, falling 10.7% to 61.7%.

- Osaka, Japan, reported the only double-digit ADR increase, rising 22.4% to JPY14,680.99.

- Hong Kong, China, experienced the largest ADR decrease (-7.6% to HKD1,778.12).

- Osaka reported the highest RevPAR increase (+29.6% to JPY13,355.15), followed by Hanoi (+18.9% to VND1,810,917.84).

Year-End Results

Hotels in the Asia Pacific region also reported mixed results in the three key performance metrics during 2014 when reported in U.S. dollars.

The region’s occupancy increased 0.5% to 68.6%. ADR was down 3.0% to US$115.67, while RevPAR fell 2.5% to US$79.39.

Some highlights from key market performers for year-end 2014 in U.S. dollars (year-on-year comparisons) include:

- Shanghai, China, reported the largest occupancy increase, rising 8.5% to 71.9%.

- Osaka reported the largest ADR increase (+8.1% to US$119.32).

- Osaka also experienced the largest RevPAR increase (+11.0% to US$105.19).

Asia Pacific’s supply for 2014 was up 3.8%, which is the first time since 2008 that it finished a year below 4.0%. Demand growth for the year was 4.3%, in line with the last two years.

“As supply and demand growth were practically on par, we have seen only a marginal increase in occupancy of 0.5%,” said Elizabeth Winkle, managing director of STR Global. “For the past three years Asia Pacific has achieved occupancy levels of 68%.”

ADR has remained flat (-0.1%) in constant U.S. dollars. As a result, Asia Pacific is barely achieving positive RevPAR growth when looking at it in constant currency, with a 0.4% increase.

Looking at the four main regions within Asia Pacific, Central and Southern Asia posted the highest occupancy growth at 2.8%, followed by Australia and Oceania with an increase of 2.2%. South Eastern Asia was the only region to post negative occupancy growth for 2014.

“South Eastern Asia’s performance was primarily driven by Thailand’s political unrest and decline in leisure demand. We started to see some signs of improvement during the last few months of 2014,” Winkle said. “Bangkok posted a 14.5% increase in occupancy during December 2014, which is a good sign overall.”

Despite the declines in occupancy, South Eastern Asia was the only region to post an ADR increase (+3.2%) for 2014. Thailand achieved a 2.6% increase in ADR in Thai Baht. Another contributor to ADR growth in 2014 came from Indonesia, with a 6.9-pecent ADR growth in Indonesian rupiah terms.

Driven by a strong performance from its luxury properties, French Polynesia posted the highest ADR growth (+7.4%) in the region.

Winkle said New Zealand hotels have a lot of opportunity in 2015. “Many eyes will be on this country and its neighbor with the Cricket World Cup, as well as the Asia Cup currently hosted by Australia,” Winkle said.

Other countries of note within Asia include:

- China, which achieved occupancy growth while also experiencing declining ADR;

- Japan, with continued devaluation of the yen, developed a 2.2% increase in rate as measured in local currency; and

- India, which experienced occupancy increases.