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Throwback 2020: State of Hotel Industry

With 2021 around the corner, we gathered insights and understand how APAC hotels are performing today through STR data. What do we look forward to in 2021? In what ways hotels will pivot their business?

2020. What a difficult and shocking year! From the Australian wildfires to the rapid spread of COVID-19 and the new variant COVID-19, George Floyd's death, to the explosion in Beirut, we have seen a fair share of historical events, likely to shape the future. Now, with 2021 around the corner, we see the new year as the year for solutions and a recovery journey from what has been a devastating year that will forever be history.


The world's economy shut down due to the pandemic that impacted hospitality with temporary closures of hospitality businesses and significantly decreased demand. With newly innovated technologies, digital solutions, domestic travel vouchers, and health and safety measures. Hospitality businesses have slowly opened their doors to people. Following these strategies implemented, we gathered insights and analyzed Asia Pacific hotel performance from STR's webinar released on December 17, 2020.

STR.2020@CoStar Realty Information, INC.


Let's begin globally; the Middle East and APAC regions are growing. However, there is a decline in Europe and the US. All attributed to the number of rising cases, including the new variant COVID-19, lockdown, and travel restrictions. As we see a gradual growth in the East and drop in the West, with occupancy above 50%, China (red line graph) has dominated the West and other parts of the East.

STR.2020@CoStar Realty Information, INC.

STR.2020@CoStar Realty Information, INC.


In Q4, we see some blue, which indicated occupancy is above 50% compared to Q3, which had more red and orange dots (below) 50%. When we compare the Indian subcontinent, we see some cities in the west and central are above 50%, which is a substantial transition from early October. The map seems inverted in China's case; despite pushing domestic travel, most cities and provinces in Western and central china are between 25%- 50%, which was above 50%-75% in October. This may be due to less travel during winter and cases in Shanghai. Southern East of Australia, we see an increase of occupancy between 50%-75% due to low cases, summer, and South Australia's Great State Vouchers. Other Southeast Asian countries, such as Vietnam, Thailand, Malaysia, Indonesia, and the Philippines, remain below 25% to 50%.

STR.2020@CoStar Realty Information, INC

STR.2020@CoStar Realty Information, INC


To manage the outbreak, the Chinese authorized place cities in lockdown, closed foreign borders, and focused on managing the virus's spread in early 2020. With the gradual easing of restriction and lockdown, weekday and corporate businesses are carrying well, the demand in China is gradually picking up. When we focus on the country’s capital, Beijing, it’s caught up in occupancy and rates, almost the same performance as last year. In July, there was a 68%-point difference in occupancy between 2019 and 2020. By December 2nd, there is a 12%-point difference, which is very close to last year's levels. Whereas, Shanghai's occupancy and rates dropped due to an increase in cases. Due to government control with testing, Shanghai can cover up quickly and move occupancy up significantly. Even though winter is coming, people know how to protect themselves, and the government is encouraging testing. China hasn't fully recovered yet, but it's the benchmark.

STR.2020@CoStar Realty Information, INC

STR.2020@CoStar Realty Information, INC


With the spike in the cases in Hong Kong, the travel bubble with Singapore remains suspended. Due to COVID-19 and 2019's political issues, Hong Kong's occupancy rates is similar to 2019, which is still not good as compared to 2018. Similarly, Thailand's major cities, Bangkok, and Phuket aren’t growing much due to the political situation there. Whereas Chang Mai, Koh Samui, and Hua In continue to steadily increase in occupancy.

STR.2020@CoStar Realty Information, INC


Despite having over 10 million cases in India, there is an increase in occupancy outside major cities such as Mumbai and Delhi. Weekends are kicking up where citizens are driving or domestically flying out of major cities to stay in popular markets like Goa and Rajasthan

STR.2020@CoStar Realty Information, INC


Maldives occupancy increased by 50%, with properties opening up and international borders open. With cases dropping, effective marketing implementation, people are going. As of December, the occupancy and good RevPAR levels are almost the same as in March 2020.

STR.2020@CoStar Realty Information, INC


Singapore’s hotel has an increase in occupancy growth in December with the use of SingapoRediscovers Vouchers, vouchers given to Singaporeans to support local tourism businesses. The growth in occupancy in 2021 due to the reliance on international and government contracts, the launch of Phase 3, and business travel lanes' opening up. With the vaccine available, we Most likely see 10 to 20% of business open up by Q2 and events by end-March.

STR.2020@CoStar Realty Information, INC


Despite the growth in cases, Indonesia's regional demand continues. Weekday domestic business in Bogor, Yogyakarta, Semarang, and other cities outside Jakarta drive-in demand. While the international border remains closed in Bali, domestic, regional hotels and villas have driven more demand than international locations. Australia seems 85% is normal, and the government is getting people to travel within the country.


What to look forward to in 2021? "New Year, New Me" applies to the hospitality industry as well, not just personal goals. The transition will be slow; the vaccine will sustain relaxation restrictions by Q3 and help travel and tourism. Long-haul will take more time to recover than domestic and short-haul flights. Domestic tourism vouchers by governments may be implemented in some countries to encourage locals to support local tourism and help businesses. The reopening parts of the service sectors will benefit industrial sectors too.


When we look at strategies hotels can implement to pivot their business, we see adjustments that will permanently impact the hospitality industry. For hotel guests and event attendees, a contactless experience is on top of their mind. This requires hotels to invest in new technologies, whether it's kiosk machines for check-ins or mobile apps. Marriot and Wyndham have implemented mobile room keys and check-in in mobile apps. Viceroy Hotels and Resorts and The Gale South Beach have created a contactless experience with an invoice system. Besides contactless service, hotel guests want the hotel to have COVID19 specific cleaning standards clearly defined. Rather than offering discounts, hotels can create unique and appealing packages, add-ons, and upselling packages to increase the hotel's revenue and occupancy from massages, wellness packages to private dining options. Slashing rates will be difficult to recover from financially. Hotels can consider alternative revenue channels such as offering the lobby or common area as a pop-up space for local businesses to showcase their products or offer special deals to hotel guests. Even creating co-sharing workspaces in event halls is another alternative revenue stream. Since international borders still restricted, hotels and government will focus on partnering up with local businesses to create exclusive packages or travel vouchers for guests will be a beneficial way to boost hotel sales and the local economy. We see countries like Singapore and Southern Australia implemented offering these vouchers to help boost the tourism economy.

2021 will be a decisive year for the hospitality industry. The hotel will first need to continue operating with a budget that accounts for the revenue lost and low demand. Hotel professionals have learned to quickly adapt to the new normal way of taking care of hotel guests, hosting events, and providing a safe environment for employees and guests. A full recovery will take time across a region at a different pace, having demand back in 2019 levels will return by 2024. While we see a steady positive growth of hotel performance in the APAC regions, we still need to follow the right health and safety protocol and find ways to support each other in 2021.


Look out for our next blog post that focuses on overdue lessons that were learned, changes in paradigm and the accelerated speed of change that must be embraced.


About Rev-Mantra Pte. Ltd.

Rev-Mantra management consulting services focus on our clients' most critical issues and opportunities: strategy, marketing (offline/online), distribution, sales representation, and analytics across the service industry and geographies. We bring deep, functional expertise but are known for our holistic perspective: we capture value across boundaries and between the silos of any organization. We have proven a multiplier effect from optimizing the sum of the parts, not just the individual pieces.



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