Asia Pacific Hotel Trends - Q4 2014


Investor interest remains firm but transaction volume declines

●  Investors retain a strong appetite for hotels but there is more money than deals at present. US$11.6 billion worth of hotel investment transactions were registered in 2014, a 8.1% y-o-y decline on 2013. Values are ahead of earnings in Tokyo, Hong Kong and Singapore and therefore investors are looking to new markets and product types.

Tourism sector remains resilient

●  2014 saw steady growth in tourist arrivals as the industry remained resilient despite political unrest and other events negatively impacting some markets. ADR declined 3.3% in the year to October 2014 but RevPAR growth in many major cities has been positive.

Upward pricing pressure set to continue

●  The fact that there is more money than deals at present can only mean upward pricing pressure in the coming quarters. Lenders are more aggressive and are playing an increasing role in pushing up prices.

Limited service and business hotels to emerge as ‘category killer’ in 2015

●  Investors are advised to be more creative in terms of structuring deals and buying into entities. A particularly large volume of capital will be put into business hotels and limited feature hotels in the coming year.

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Robert McIntosh
Executive Director - CBRE Hotels, Asia Pacific
O: +65 6326 1200
M: +65 8123 0208