Optimism is on the cards for hospitality markets in Asia-Pacific (APAC) this year. A broadly positive economic landscape combined with easing regulation in several key destinations and a widespread appetite for technology investment will create robust conditions for a positive year ahead.
The region is home to some of the fastest growing economies in the world. Both India and Vietnam, for example, are experiencing annual GDP growth of above 6 per cent, according to the International Monetary Fund, while APAC can expect GDP growth of 4.4 per cent over the course of the year ahead.
This background paints a positive picture for the region.
A rapid rebound in tourism continues across APAC after the COVID-19 pandemic, thanks in part to the continued easing of travel restrictions and improved air connectivity in 2024. Amadeus’ own figures reveal that hotels in the region are seeing strong demand, with 67 per cent average occupancy rates from January to October 2024.
This year, inbound and outbound travel to and from Asia, including China, is expected to reach pre-pandemic levels for the first time. Given the importance of China as a key travel source market, this comeback has been long-awaited, with the destination easing restrictions to accelerate the process.
Until the end of 2025, visa exemption will be applied to ordinary passport holders from Bulgaria, Romania, Croatia, Montenegro, North Macedonia, Malta, Estonia, Latvia and Japan on a trial basis, while officials have also confirmed visa-free stays will be extended to 30 days, up from the current 15. Thailand, another tourism powerhouse, has also expanded its tourism visa exemption scheme to include 93 countries, illustrating renewed ambition in the sector.
Looking ahead, the growing APAC middle class is expected to account for 50 per cent of global air passenger growth over the next 15 years, according to IATA. Next year alone, the global share of leisure travel spending from APAC is expected to increase from 29 per cent in 2023 to 35 per cent in 2025.
Finally, over the festive period, destinations including Phu Quoc in Vietnam, Macau in China and Cebu in the Philippines saw some of the highest hotel occupancy rates anywhere in the world – and these trends can be expected to continue into 2025.
How are hoteliers responding?
There is, then, plenty to suggest the year ahead will be a positive one for APAC hospitality. In our Travel Technology Investment Trends report, we asked 100 industry leaders and found, not only are there clear signs of broad investment, but also substantial increases in funding for technology.
On average, hoteliers planned to spend 16 per cent more on technology investment in 2024 than in the prior year, with 65 per cent of the industry planning to expand investment by more than 10 per cent.
Our study revealed the average spend on digital media, per property, is currently $74,337, with the greatest focus of campaigns being to target new segments of guests. This remains a key area of investment, where campaigns can also help companies identify where guests are currently searching and booking, help businesses make strategic decisions.
At the same time, virtually all (98 per cent) of the 100 hospitality leaders we spoke to recognise that artificial intelligence (AI) has the potential to bring significant benefits to their businesses. Generative AI, such as chatbots, was considered the most important technology by 37 per cent of respondents, with hoteliers hoping that the technology will help them identify and upsell opportunities to travellers at all stages of the booking process and create personalised experiences for guests.
What impact will this have on travellers?
For travellers, these investments have the potential to translate over time into quicker and smoother service throughout their trip. AI generated personalised offers, for example, will elevate guest experiences, as they will be able to have more comprehensive and connected trips, with easy access to compelling offerings such as car hire, added excursions or specific room attributes.
Other new capabilities will allow for quicker service time and a smoother booking process. These changes increase the opportunity for improved guest satisfaction and more memorable travel experiences.
From the moment travellers begin their search to the time they return home, new solutions empower hotels, destinations and travel providers with insights to enable exceptional experiences at every step of the journey.
