A new report from Colliers International has shown that overall occupancy and average daily rates across Asia Pacific hotels have reached unprecedented depths as a result of COVID-19.

The Hotel Insights Q2 2020, released on Thursday, indicates hotels in China, Hong Kong and Taiwan have been severely affected by the pandemic, with occupancy rates in China dropping to as low as 7 per cent in February 2020.

According to the report, overall room occupancy and average daily rate (ADR) for Asia Pacific decreased to 42.1 per cent and US$97.86 respectively in Q1 2020, levels not witnessed even during the global financial crisis for this region.

Colliers Hotel Insights Q2 2020 - At a glance: 

• Overall room occupancy and average daily rate (ADR) for Asia Pacific decreased to 42.1 per cent and US$97.86 respectively in Q1 2020, levels not witnessed even during the global financial crisis for this region.
• In local currency terms, Bali, New Delhi and Sanya were the only markets that witnessed year-on-year increases in ADR in excess of 1.0 per cent in Q1 as these markets perhaps entered lockdown later than most.
• Government stimulus packages and strong medium to long-term fundamentals are expected to provide cushioning to short-term impacts.

In local currency terms, Bali, New Delhi and Sanya were the only markets that witnessed year-on-year increases in ADR in excess of 1.0 per cent in Q1 as these markets perhaps entered lockdown later than most.

Hong Kong, Osaka and Shanghai were the only markets that saw double-digit year-on-year declines in ADR during the period.

Source: Colliers International

Colliers International Asia Executive Director and Head of Hotels and Leisure for Valuation and Advisory Services, Govinda Singh, told WILLIAMS MEDIA the biggest immediate challenge facing the hotel industry is assessing when is the right time to open.

"If you open too early, you will exacerbate the current situation, too late and you would have missed the benefit," he said.

"It's also important to note that the way people travel and consume will have changed, from the way they interact to health and cleaning, all of which will have to be clearly communicated to guests from the time they are greeted and throughout their stay.

"Regular updates will be a must and indeed all of this will have to be well within government guidelines."

He added markets that had a strong domestic following, such as China, Japan and Vietnam, were expected to recover quicker than others.

"Those that are meetings, incentives, conference and events (MICE) dependent will most likely be last in line," he said.

"Further, we would also expect these hotels to most likely also be behind markets that depend predominantly on international visitation eg Singapore.

"The expectation is that governments are more than likely to retain bans on larger gatherings for some time to come, with corporate followed by short and then long haul leisure.

"All in all, we expect a Nike swoosh recovery for the sector over the next 12-18 months."

Click here to view the full report. 

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