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Subdued Australian investment as Asia Pacific experiences 'unprecedented' first half downturn - CBRE

New data from CBRE has shown the depth of COVID-19's impact on hotel markets in the Asia Pacific, with the region experiencing the largest year-on-year decline in tourist arrivals of any region in the first half of 2020 at 72 per cent.

A sizeable gap between buyers and sellers combined with the desire of owners to wait out the pandemic led to subdued Australian hotel investment in the first half of 2020, according to a new report.


CBRE's Asia Pacific Hotel Marketview for the first half of 2020 identifies Caydon Property Group's $40 million sale of the Sebel Moonee Ponds Hotel in Melbourne as one of the few highlights for the country's hotel market in an otherwise quiet period for investment activity.


But the firm does forecast deal flow to pick up towards the end of this year as "investers seeking opportunistic acquisitions enter the market".

CBRE's Asia Pacific Hotel Marketview - At a glance: 

  • Asia Pacific hotel transaction volume stood at approximately US$4.3 billion in H1 2020, a fall of approximately 31 per cent compared to the same period of 2019.

  • Regional hotel occupancy fell by 15.6 percentage points to 54.5 per cent in H1 2020, with markets reliant upon international arrivals recording severe declines.

  • Asia Pacific saw the largest decline in tourist arrivals of any region in H1 2020, with visitors falling by 72 per cent y-o-y.

Growth of International visitor arrivals by region.

Elsewhere, the report indicates Asia Pacific saw the largest decline in tourist arrivals of any region in the H1 2020, with visitors falling by 72 per cent year-on-year.

Growth of international visitor arrivals (H1 2020 vs H1 2019)

The figures also show regional hotel occupancy for the region fell by 15.6 percentage points to 54.5 per cent in H1 2020 as markets reliant upon international arrivals recorded severe declines.

Hotel Occupancy in the top three Asia Pacific markets for 12 months to June 2020.

The near total shutdown in international travel also led to occupancy and ADR suffering drastic falls, with CBRE data showing Regional ADR declined by 13.7 per cent y-o-y US$86.5 in H1 2020, while RevPAR stood at US$49.6 in H1 2020, representing a drop of 29.3 per cent y-o-y.

ADR across top three markets to June 2020.

With Asia Pacific hotel transaction volume standing at approximately US$4.3 billion in H1 2020, a fall of approximately 31 per cent compared to the same period of 2019, CBRE believes the effects of the pandemic will most likely be felt by the sector for some time to come.

Asia Pacific Transaction Volume

"The hotel sector more vulnerable than many other property sectors to the impact of measures to contain the pandemic," the report read.


"Given many of these restrictions will remain in place, purchasing activity is likely to remain muted in H2 2020."


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Originally published: https://www.thehotelconversation.com.au

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