Hotels in the Asia-Pacific region are poised to recover from the COVID-19 pandemic, but which country will recover at what pace depends on a number of factors.

During the "Asia-Pacific Forecast" panel discussion of the online Hotel Data Conference: Global Edition, industry experts spoke about expectations for the region as well as how the pandemic is changing how they forecast performance.

Citing research by Tourism Economics, Jesper Palmqvist, area director, Asia-Pacific, at STR, pointed to the five factors that will affect the recovery of travel and tourism: vaccine deployment allowing a return to growth, challenges in vaccine distribution, travelers likely opting for closer-to-home destinations, leisure travel leading the way while business travel remains subdued and the lingering impact of the economic recession on travel. STR is CoStar's hospitality analytics firm.

When preparing new forecasts, STR factors in total room inventory occupancy, which includes the hotels that are closed, he said. It also factors in the delayed pipeline, as few projects have been deferred or abandoned, with most developers delaying until 2021 or 2022.

STR is revising its forecast for Japan again because of the recent decision to not allow overseas spectators to attend the Tokyo Summer Olympics this summer, he said.

In a time of multiple travel restrictions, many of China’s markets are doing well because they can rely on domestic travel, but some Asian markets, such as Singapore, Bangkok and Hong Kong need international travel, Palmqvist said. While demand should return in 2024 and 2025, as demand has slowed between markets, that long and deep trajectory means for markets like Bangkok that rates will take longer to come back.

“The domestic will rule, it will rule for some time, and that means something for the longer term,” he said.

Jakarta and Indonesia both have a lot of domestic business, so they will continue to see demand, he said. That’s not the same thing as rate and revenue per available room, but that domestic growth will mean a lot over the next couple of years.

China is interesting because of its incredible growth in outbound tourism, Palmqvist said. There is a need, and opportunity, for markets to diversify their source market growth, which is something to factor into forecasting as well.

For example, Tokyo has depended on almost a quarter of its arrivals coming from China, he said. Prior growth trends indicated arrivals would amount to 30 million and 40 million over the next few years, but that will change. That said, Japan, and Tokyo specifically, are destinations that could see a faster recovery because of what they’re doing to drive demand.

The leisure resort markets around Southeast Asia will pick up as soon as vaccinations start more broadly across big source markets, such as Australia, because of pent-up demand.

In looking at how Hilton has changed its approach to forecasting, there’s less weight on the accuracy of the forecasts, said Liz Perkins, vice president of revenue management and commercial services, Asia-Pacific, at Hilton. The company has placed a large focus on short-term forecasts because it is crucial to understand the six-week window and how trends and consumer behavior are changing.

Prior to the pandemic, though, forecasting was on a path to change already, she said.

“The pandemic has accelerated our need to look at the whole forecasting process,” she said. “Right now, we are going back and reviewing what is our forecasting process, how do we want to enable this for the future? We have to start thinking, ‘Do we go back to old forecasting processes, or how do we enable future sort of forecasting processes?’”

Before 2020, lead times were shortening and consumers were changing their behavior, Perkins said. The sources of business were coming through different channels, particularly digital and mobile channels. Moving forward in the forecasting process, there’s a need for different data sources — ones that provide forward-looking data and consumer behavior data as opposed to historical data.

“That’s not going to be what helps us move forward,” she said. “It’s going to be an indicator, but it’s not necessarily going to be the basis of our forecast as we move forward.”

The landscape of data sources is changing rapidly, and Hilton is looking at that aggressively in its forecasting process to be more accurate for its hotels, she said.

Understanding where hotels’ business came from is a necessary part of the forecasting process, said Frederick Wong, vice president of sales, revenue and distribution, Asia-Pacific, at Hyatt Hotels Corp. Every country is coming out of the pandemic at a different pace. Because of each country’s travel restrictions and quarantine requirements, international travel is gone.

When presenting business plans to owners, the forecast must be reasonable, he said. The forecast can’t be overly optimistic, but cautiously optimistic, which leads to working together on controlling costs while finding revenue.

Brands have to understand the types of owners they are working with in the Asia-Pacific, Wong said. One type is more institutional, such as private banks and investors, while others are private equity or state-owned companies. They each require specific approaches, he said.

The owner of a private or listed company needs to have the hotel business fully planned because they need to submit a forecast to their bank, he said. The owner of an institution isn’t dealing with the bank as much and is more interested in cash flow.

As soon brands can present concrete plans of action supported by the numbers, “this is where we gain the trust and the belief from the owner,” Wong said.

The relationship between brands and owners is closer now, Perkins said. That means the brands have to be close on getting the forecasting piece right.

“It’s no longer about an aspirational demand forecast,” she said. “That’s not what we’re forecasting for. It’s a cash-flow forecast. Our owners are hurting the most. This is their money. This is their resource. This is their equity with team members.”

By working closely with owners on the cash-flow forecasts, it builds the relationship by showing they have as much skin in the game as the owners, Perkins said. Showing support for owners is crucial, as is understanding that the owners are the ones who have to make the tough decisions with their money.

“Now more than ever, this is where you are seeing true partnerships between hotel companies and owners and really coming together for the good of the business,” she said.