The COVID-19 Pandemic: Implications for Asia Pacific Hotels June 2020
CBRE retains its forecast of a global recession in 2020, with a sharp downturn in Q2 2020 and the start of a rebound in Q3 2020. In May, Asia Pacific GDP growth forecasts were revised down to 1.4% from the previous forecast of 4.2% made in January.
Regional travel remains at a standstill owing to tight restrictions by authorities, significantly reduced air traffic and risk aversion by travellers. In April, visitors to Hong Kong SAR fell nearly 100% from the same month last year.
Lockdown restrictions across the region gradually began lifting in mid-May. Until regional and international travel becomes easily available, growth will be confined to domestic and drive leisure markets. There has been a substantial uplift in interest in easily accessible resorts.
Overall occupancy in Asia Pacific remains low at less than 30%. Room rates are close to 50% of what they were a year ago.
Hotel investors are still in wait and see mode. There is a large gap between vendor and purchaser expectations. CBRE has not yet seen any significant transactions that indicate where prices now sit.