Hotel and Hospitality Trends in Asia Pacific in 2024

As the Asia Pacific hotel market continues to undergo structural changes, hotel owners and operators are refining operational and branding strategies. Drivers include rising labor and utility costs, limited supply of new properties, and a prolonged peak in the interest rate cycle.

Major global hotel operators are expanding rapidly across the region, with nearly half of new hotel developments being delivered through five hotel groups: Marriott (60,566 rooms), Accor (47,052 rooms), IHG (34,227 rooms), Hilton (31,606 rooms) and Wyndham (21,455 rooms). These operators continue to invest in loyalty programs and niche segments to gain market share while also significantly increasing their technological capabilities.

Despite persistently high interest rates around the world, investment in the Asia-Pacific hotel sector has been resilient, thanks to continued interest in Japan and Australia, a record year for serviced apartment sales in mainland China and a steady flow of deals in the thriving Korean market.

This report discusses the key trends impacting the hospitality sector in the Asia Pacific region, including an analysis of the current market situation, the latest activities of major operators, asset management and investment trends, and ESG issues.

Key trends

Operators maintain high day rates due to tight supply, increased demand and rising labor costs: While hotels have successfully adapted to lower levels of applicants and staffing, new labor issues pose challenges for owners and operators. With this challenge expected to last through 2024, operators will be looking to maintain high daily rates to record some of these losses on their balance sheets.

Major global operators continue to expand aggressively, with an increasing focus on lifestyle brands: Over the past six years, the “big five” operators have increased their global market share from 20% to 24%, a trend that is likely to continue as they continue to work to expand their presence across all segments.

A big part of that strategy is expanding into the lifestyle sector, where brand loyalty programs, cutting-edge design and wellness initiatives are driving demand.

Investments remain stable despite debt headwinds, with investors still favouring higher-end assets and brands: Amid ongoing capital market disruptions, the upscale+ segment has emerged as the most attractive segment for hotel investors in the Asia-Pacific region, driven by rising global wealth and travellers’ willingness to spend more on accommodation following the prolonged closure of borders during the pandemic.

Sustainability/ESG initiatives continue to be implemented; hotels with strong ESG initiatives are likely to outperform: The Asia Pacific hotel and hospitality industry’s commitment to ESG initiatives continues to gain momentum. Rising energy costs, which have increased significantly since the start of the pandemic, along with further commitment to ESG initiatives are expected to accelerate the industry’s focus on sustainability. Other supporting factors include a shift in guest preferences towards more sustainable tourism, along with growing demand for climate risk disclosure.

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