Hotels in Asia Pacific continued their good fortune during the first six months of 2008, with revenue per available room (revPAR) up 13.2%, outperforming the 12% growth achieved in 2007. Analysis by Deloitte, the business advisory firm, shows that revPAR broke the US$100 milestone to reach US$103. Improvements were driven by double-digit increases in average room rates, which now stand at US$151.

Three of the four sub-regions - South-East Asia, South Asia and Oceania – all reported double-digit revPAR growth. Average room rates continue to drive performance while occupancy either grew marginally or declined. North-East Asia followed the same trend; however, revPAR growth was lower at 5.3%.

Two destinations reaping the benefits in the first half of the year are Bali and Singapore. Bali achieved the highest revPAR growth of any destination in the Asia Pacific region, with a staggering 39.5% increase in revPAR to US$81. The Indonesian resort island has seen impressive growth over the last 21-months as it recovered from the bomb attacks in 2005.

Singapore has also seen exceptional growth. Although occupancy dipped 3.8% to 79.8%, average room rates increased to US$213, resulting in revPAR growth of 34%. This year, the country will host the inaugural Formula 1 SingTel Singapore Grand Prix. This will be the first street race in Asia, attracting Formula 1 enthusiasts from around the world. Singapore Airlines recently started flying the super jumbo A380’s to London, Sydney and Tokyo and more routes will follow. These new flights, with increased capacity, combined with the recent opening of Changi Airport’s new terminal, will put Singapore firmly on track to achieve its Tourism 2015 goal of attracting 17 million visitors.

In South Asia, hotels in India are also seeing strong revPAR growth, up 14.2% to US$170, again driven by average room rates. Mumbai saw a 19.6% increase in revPAR for the first half of 2008, reaching US$232. Average room rates in the city now stand at US$317, second to Delhi and Bangalore that both achieved average room rates of US$319. Increased capacity at Mumbai’s Chatrapati Shivaji International Airport and a shortage of rooms in the city is driving this pattern, allowing hoteliers to increase average room rates.

In North-East Asia, Beijing is in the final phase of preparations for the summer Olympic and Paralympic Games. Although occupancy in the city fell to 62.5% for the first half of the year, average room rates increased 18.5% to US$146. In preparation, a massive amount of hotel development and refurbishment has been completed to accommodate the estimated 600,000 international and 2.5 million domestic tourists expected. Extra rooms usually flood the host city ahead of the Olympics, as happened in Barcelona and Sydney, where supply rose by around 30%. Both cities suffered a crash in occupancy after the Olympic Games, an experience avoided by Athens, where the lack of building sites and high land prices kept new build to a minimum. With this in mind, it will be interesting to see the legacy of the Beijing Olympics unfold.

Commenting, Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality & Leisure at Deloitte said: “Markets across Asia will inevitably be impacted by a slowdown in the US economy; however, the outlook for most Asian economies is strong, with growth rates above world averages. With forecasts that by the end of 2010, international visitor arrivals to the Asia Pacific region will be close to 500 million and tourism revenues at US$4.6 trillion, there is no rest for this dynamic region.”

Looking ahead, Marvin Rust, Managing Partner for Hospitality in Deloitte UK said: “The outlook for hotels in the Asia Pacific region is promising. In 2008 there a number of sporting events attracting a large number of travellers, particularly the Beijing Olympics and the Formula 1 SingTel Singapore Grand Prix. Major developments in the aviation industry, including the expansion of low-cost airlines and additional routes for the Airbus A380, will enable travellers to move more freely in the region.”

Hotel performance of selected markets in Asia Pacific year-to-June 2008 

Source: STR Global HotelBenchmark™ Survey

Note:

All analysis in US$.

Preliminary year-to-June 2008 figures are used.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its Member Firms.