Alta blog

Alta Thoughts (January 2024)

By Rakesh Patel

A tale of two cities I love. I have spent most of this month between HK and BKK, observing the challenges and opportunities through a travel lens.

HK is still somewhat constrained by airlift, with the FT covering the challenges faced by Cathay Pacific. And with twice as many HK-ers now crossing into the mainland, compared to mainlanders visiting HK, there is an “…urgency for Hong Kong to develop a tourist offering…something beyond luxury retail…”, comments my former HSBC colleague Fred Neumann, in this FT article.

The Thailand Tourist Forum in BKK, covered the opportunities in hospitality from AI and digitalisation, whilst highlighting improved performance and growth prospects for Thailand in 2024, led by returning Chinese and ravenous Indians. (More TTF notes below).

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.


The Thailand Tourism Forum in Bangkok

The Thailand Tourism Forum in Bangkok was led by a healthy dose of AI and digitalisation, and the impact and opportunity for the hospitality industry. Google tells us that for trip searches, users go through multiple sources and touch points, hence decision making has become a lot harder. AI is helping travellers with filtering, planning and experiences. For hotel owners/operators, the AI impact stretches from revenue management to staffing.

For the current environment, STR data shows Thailand hotel occupancy is normalising with strong ADR growth, and the Chinese are returning, albeit still constrained by airlift. JLL notes it was a challenging 2023 for hotel investment, though 2024 looks more promising, with improved business performance and spreads over funding, leading to a pipeline of transactions to book.


The “real” value of green certifications for hotels in Asia Pacific

Is it worth turning your hotel “green”? With hotels being a large carbon emitter, the pressure is mounting on owners for change. But what’s the business case in APAC?

APAC has lagged Europe in the green evolution, and the regulatory pressure and incentive has not been as broad or intense. Nevertheless, countries like Singapore and Australia are progressing and hotels can benefit from government incentives, access to green financing and retain corporate demand by going green.

Operators in APAC, facing standards being set by HQs in the US and Europe, are also getting in on the act, convincing owners that green certification is not just a USP, but also a necessity to stay competitive.

As for guests, multiple OTA surveys show they would prefer to stay in green certified accommodation. Whether this trumps a good pricing deal is yet to be seen. When guests vote with their wallets in APAC, that may prove to be the tipping point.


HVS Global Hotel Industry: 2023 Recap and 2024 Outlook

HVS gives us a global view on the hotel industry in 2023 and their outlook for 2024.

US and Europe operating performance plateaued somewhat in 2023, having led for “revenge travel” trends previously. By contrast, Asia-Pacific saw a strong 2023, playing catch-up with the RoW.

For 2024, HVS forecasts better transaction volumes in the US and Europe, as sellers get realistic on pricing, with higher financing costs. Further growth of transactions in APAC above 2023 levels, will depend on improvements in flight capacity and infrastructure.