Asia Pacific Hotel Industry Poised for Recovery in 2025 Amidst Regional Disparities
The Asia Pacific hotel industry is on a path to recovery as it emerges from the challenges posed by the COVID-19 pandemic.
JLL Survey highlights challenges and optimism in post-pandemic hospitality landscape
The Asia Pacific hotel industry is on a path to recovery as it emerges from the challenges posed by the COVID-19 pandemic. However, the pace of this rebound varies significantly across different regions, according to JLL's Hotel Operators’ Sentiment Survey (HOSS) 2024/2025.
Regional Disparities in Recovery
The survey categorizes the region into 'Outperforming markets'—including South Asia, the Maldives, Southeast Asia, and North Asia—and 'Slow-growing markets' such as Australasia and Greater China. As of September 2024, international tourist arrivals in the Asia Pacific were still 15% below pre-pandemic levels, though domestic travel routes have shown marked improvement.
Challenges Facing the Industry
A significant challenge identified is the persistent talent shortage. High staff turnover, driven by competitive salaries in other industries, has made recruitment, especially for guest-facing roles, increasingly difficult. This trend is expected to continue into 2025, with staff costs projected to rise due to increased headcount and inflationary pressures.
The Food & Beverage (F&B) sector is also facing hurdles. Despite the region's strong dining reputation, F&B results are anticipated to remain below pre-pandemic levels. Nevertheless, year-over-year growth in F&B revenue and profit is expected across all subregions in 2025.
Positive Outlook for 2025
The Meetings, Incentives, Conferences, and Exhibitions (MICE) sector is set for a robust comeback, driven by a growing demand for creative and engaging experiences. Despite challenges expected to persist into 2025, there is a general sense of optimism among Asia Pacific hotels for the coming year.
Focus on Technology and Sustainability
Investment in technology is a top priority for the industry, with a focus on upgrades that enhance operational efficiency and reduce waste. Compliance with sustainability and energy efficiency standards has become essential, influenced by the latest edition of the Uniform System of Accounts for the Lodging Industry (USALI), which includes metrics related to energy, water, and waste. This shift is also driven by increased scrutiny from owners, investors, and financial institutions regarding sustainable practices.
While challenges such as labor shortages and the need for sustainable practices persist, the Asia Pacific hotel industry is cautiously optimistic about its recovery and growth prospects in 2025. The industry's trajectory will largely depend on broader macroeconomic and geopolitical factors and its ability to navigate these ongoing issues.
