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01
Aug

Alta Thoughts (July 2023)

By Rakesh Patel

Always great to attend the South East Asia Hotel Investors Summit (SEAHIS) in Bangkok and speak on a wellness panel. Insightful content from the speakers over two days. Some of the key macro takeaways:

  • Hotel occupancy normalising with ADRs above 2019
  • Key challenges remain airlift and staffing
  • China domestic travel is recovering before internationa
  • Hotel franchising in Asia may follow US lead
  • Branded residences are generating a 20%+ premium
  • Banks to restructure 5-10% of their hotel loans
  • More momentum for hotels activating ESG strategies
  • Wellness demand is moving hotels beyond spa++s

Below are a few of our recent thoughts posted on LinkedIn. As always, good to hear your feedback and exchange ideas. You can follow us directly on LinkedIn and go to our website.

 

More from the SEAHIS event. Key country takeaways:

  • Vietnam: Going through once a 10-12 year real estate crisis
  • Singapore: Strong ADRs. Transactions at tight cap rates
  • Thailand: Tourist arrivals above forecast. Hotel cost rises modest
  • HK: Chinese slow to return. Cap rates below funding costs
  • Japan: Active transactions with cheap funding. Ability to create value
  • Sri Lanka: IMF bail-out progresses. More destination PR needed
  • Malaysia: Suffering from oversupply and low ADRs in KL
  • Indonesia: Infrastructure improvement. Strong domestic tourism

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    Centre for Mindfulness Launched at Harvard

    A progressive and much-needed initiative from Harvard, with the launch of a $25m centre dedicated to advancing the science of mindfulness.

    The Thich Nhat Hanh Centre, is named after a Bhuddist Zen master, and will focus on bringing rigorous research methods to the impact of mindfulness on health and well-being.

    This evidence-based approach will help in another objective of the Center, which is to educate and train the public in mindfulness. To quote the Centre – “In public health, we work at population scale – we aim to reach and uplift entire communities”.

     

    Strong performance kickstarts 2023

    More evidence that despite macro headwinds, travellers want to travel, seemingly beyond the “revenge travel” trend. Whilst the overall cost of living is rising, people are not sacrificing their travel plans, and willing to swallow higher hotel and flight costs.

    This JLL report evidences this. Global Revenue Per Available Room (RevPAR) for the start of 2023, is about 7% above 2019 levels. Europe, US and ME lead the way, with Asia playing catch-up now China has reopened. Accelerating Chinese demand is likely to be supportive to these trends into 2024, as the Chinese add more long-haul travel into their plans.

    Within this growth trajectory, JLL’s expectation is that there will continue to be demand for immersive experiences, alongside a pick-up in business and group travel, triggering further hotel investment activity.

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