Alta blog

By Rakesh Patel

The Asian hotel community gathered recently at IHIF in Hong Kong and HICAP in Singapore – valuable forums to exchange insights and perspectives. It was a pleasure to join panel discussions on hotel investment alongside industry colleagues.

Some key takeaways below and links to the STR presentations with some good data.

Macro and Market Overview

• Sentiment remains cautiously optimistic. 2025 sees moderate growth off the back of a strong 2024. Momentum picks up in 2026.

• APAC supply growth has slowed for now, supporting occupancy and ADR stability.

• Hotels attracting investment over other real estate sectors, given overall operating performance, positive spreads and structural trends.

• First time buyers of hotels an increasingly larger proportion.

• China outbound remains impacted by domestic economic challenges.

Regional Highlights

• China: May be bottoming but hard to attract capital.

• HK: Occupancy improving but ADRs still lagging with long-haul arrivals lagging.

• Japan: Top investment focus; positive carry and fundamentals remain strong.

• Australia: Domestic demand steady; labour and cost pressures persist.

• Thailand: Repositioning with overall visitors lower and shifting source markets.

• Singapore: Momentum has slowed; Stable fundamentals; luxury is robust.

• Vietnam: Regional outperformer, demand good though rates are lower.

• India: Emerging middle class and infrastructure build driving optimism.

Investment and Strategic Themes

• Lifestyle and luxury segments have superior CAGR.

• Value-add and under-managed assets most attractive.

• Franchise penetration in Asia low at 17% presents significant upside.

• Good interest in long-stay models and branded residences.

• AI enhancing operations and guest experience; OTAs under threat from AI driven direct booking?

• F&B cost challenges with margins under pressure. Leads to more outsourcing?

• Demographic and affluence trends underpin sustained demand growth across key markets.

• Private credit expanding as an alternative funding source to traditional banks.

Outlook

• 2025: Modest growth amid consolidation post Covid.

• 2026–2028: Expected up-cycle peak, supported by limited supply and improved efficiency.

• Investors prioritizing value-add opportunities and scalable management platforms.

• Strategic focus on franchise expansion, lifestyle positioning, and technology to unlock value and sustain margins.

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

How AI is Transforming the Hospitality Industry

The impact of AI on industry is only just beginning and will no doubt accelerate from here. How about the hospitality sector? 73% of hoteliers believe AI will “significantly transform the hospitality industry”.

Here are some of the advantages of AI in this sector, and some of the inevitable challenges.

Wins: operational efficiencies is probably the biggest win especially for repetitive tasks; guests satisfaction through personalisation using chatbots and tailored offerings; revenue and pricing strategies; smarter digital marketing using AI to drive direct bookings.

Challenges and risks: data privacy; guest perception around using tech vs human touch; integration into older technology stacks; staff resistance to change and training needs.

Hotel considerations: strategic planning aligning AI with goals; allocating budget to IT spend; mitigating implementation challenges.

Sustainability continues to pay dividends in the hospitality industry

Sustainability paying dividends for the world’s largest lodging REIT. Take a look at Host Hotels and Resorts positive impact actions, whilst delivering financial returns to their shareholders.

Data comes first when reviewing green projects to fund. Aggregated completed projects over 5 years resulted in total annual utility savings of $23m, with a positive ROI.Climate risk plans for all properties. USGBC member National Institute of Building Sciences found that for every $1 invested in hazard mitigation strategies, $13 is saved in disaster recovery efforts, property loss, etc.
Host benefits from $5bn in green bonds and sustainability-linked credit facilities, that provides lower-cost capital to fund sustainable projects.

Finally, a quote from Host: “By embedding green building strategies across our portfolio, we not only reduce the impact of our hotels, but also enhance resilience, increase asset value and support access to lower-cost capital”.