Roughly three quarters through 2024, there now appears to be a clear disparity in growth across various Asia-Pacific markets, according to STR's Jesper Palmqvist.
Speaking on the latest episode of the Hotel News Now podcast, Palmqvist notes there seems to be three "buckets" across the region.
That includes:
- Markets experiencing declines in demand and rate, such as China (revenue per available room down 4.5% in U.S. dollars year to date through August) and New Zealand (down 12.9%).
- Slow and steady growth markets like the Maldives (up 9.2%), Philippines (down 2.5% in U.S. dollars but up 2.1% in Philippine pesos), Singapore (up 2.6%) and Australia (up 6.4%).
- And the clear outperformers, headlined most obviously by Japan (up 12%) but also including Indonesia (up 17.9%), Malaysia (up 24.5%) and Vietnam (up 18.5%).
He said among those markets, Japan and Vietnam are best poised for continued growth.
"I think Japan will take a little bit of time for that slowdown at a national level because we still see that rate growth in Tokyo and Osaka and Kyoto to some degree," he said. "So that's going to continue a bit. I would expect Indonesia and Malaysia to soften a bit. Thailand will see something before peak season comes in because growth in peak is always going to be lower than growth in shoulder and low. You can have more impact. I think we'll see percentage gain is going to slow down in some of those markets there. Vietnam will keep going for a while, from that lower end, for sure. I think New Zealand and China will take a little bit longer, for totally different reasons there."
Palmqvist also noted two major news items happening in the region recently: Oyo's planned $525 million acquisition of Motel 6 parent company G6 Hospitality, and the Chinese government's interest rate cut and additional stimulus efforts to buoy consumer confidence and spending.
He said the G6 deal marks a new level of growth and maturity for Oyo.
"For me personally, it looks like a good deal," he said. "I think it's a great expansion base for a company like Oyo that has [had] such an interesting journey."
He said the company had been criticized earlier in its history for "growing too fast" in some countries like China, but the G6 deal is set up to be a more strategic play. That's indicative of how Oyo has changed in recent years, he added.
"When you think about the growth they've done post-COVID in strategic markets, the product is different," he said. "They've gone through a maturity process in 10 years that took some companies, 30, 40, 100 years, right? And for me, that's what's so impressive."
In terms of China, Palmqvist said there is some hopefulness that a 50 basis point interest rate cut will help the overall economy, but there are some people saying the move doesn't go far enough.
"That confidence piece is so important in a market like China," he said. "People do work as a machine is the collective thinking. There's so much money behind it. So I think there'll be some impact going into [the fourth quarter] in terms of some spending."
For all of HNN's discussion with STR's Jesper Palmqvist, listen to the podcast above.