HOTEL transaction volume in Asia in 2012 fell to almost half of 2011’s, dropping from US$3.7 billion to US$1.9 billion, dragging down the global total.
Calling these figures a “big surprise” at HICAP Update, Mike Batchelor, managing director, investment sales, Jones Lang LaSalle’s (JLL) Hotels & Hospitality Group, pointed out that the main drops were from Singapore and China, with possible reasons being the “cost of real estate and high pricing that needs to be paid” to enter these markets. He revealed that the hotspots last year were Japan, Hong Kong and China, with shares of 23 per cent, 20 per cent and 15 per cent respectively.
Batchelor added that Asia remains a small market for hotel transaction volume compared to other regions – it is less than a tenth of the Americas’.
Hotel transaction volume in the Americas grew seven per cent from US$16.3 billion to US$17.5 billion, and Australia expanded eight per cent from US$1.3 billion to US$1.4 billion. Europe, the Middle East and Africa registered an eight per cent decline from US$11.9 billion to US$11 billion.
Globally, hotel transaction volume slid by five per cent to total US$31.8 billion in 2012. However, this is predicted to inch upwards by 3.8 per cent this year, touching US$33 billion.
Responding to the drop in Asia, Outrigger Hotels and Resorts vice president, development and projects, Asia-Pacific, Michael Cowan, said there could have been little impetus to sell in 2012, with family-owned businesses not in financial difficulty and no distressed assets.
Park Hotel Group CEO, Allen Law, noted that while the market had stabilised last year, he was “seeing a lot of action” in terms of investment leads across the region in 2013.