Hotel investment on the rebound
Published:Friday | July 22, 2011 | 12:00 AM
Dennis Morrison, Columnist
Hotel investment worldwide is rebounding after the deep slump, consequent on the Great Recession of 2008-2009, with US$14.8 billion having been invested in the second quarter of this year.
This represented an increase of 117 per cent over the corresponding period of 2010, and was driven by investment of US$7.4 billion in the Americas region, which saw growth of 187 per cent.
The Asia-Pacific region, where hotel investment had fared better in the recession, went up by 59 per cent with strong activity, particularly in Singapore, China, Japan and Hong Kong.
An example of the dynamism of the Asia-Pacific region is its large share of the global pipeline of new hotels and resorts being developed by Marriott Hotels & Resorts.
This hotel chain, which is Marriott International's signature brand, will open 50 new hotels and resorts globally in the period up to 2014, of which 24 or almost a half will be located in the Asia-Pacific region, with China as the leading destination.
By comparison, 12, or less than a quarter of the total, will be in the Americas, nine in the Middle East and Africa, and only four in Europe. This year, four of the five properties to be opened by Marriott Hotels & Resorts in the region will be in China - two in Shanghai, and one each in Guangzhou and Haikou.
Marriott's robust expansion in Asia-Pacific reflects the emergence of the region as the fastest growing in the global tourist industry.
The most recent statistics from the World Tourism Organization show that in April 2011, international visitor arrivals to Asia-Pacific increased by 6.8 per cent and for the first four months by 5.4 per cent, ahead of 4.5 per cent for total international tourist arrivals.
The best performers in the region included Hong Kong up 20 per cent; Vietnam, 22 per cent; Singapore, 17 per cent; Cambodia, 11 per cent; and Australia, up eight per cent.
In the Americas, tourist arrivals increased by five per cent, which was also above the overall global rate, driven by a surge in South America, up 17 per cent.
Destinations in North and Central America, as well as the Caribbean were, however, below the pace of expansion internationally. In the case of Jamaica, stopover visitor arrivals increased by 4.4 per cent for the January-March period, and indications are that the rate of growth has fallen off in subsequent months.
Jamaica's tourist industry has lost momentum with the collapse of investment flows in new rooms since 2008-09, and the island has fallen behind in reigniting investment activity in the industry.
Another key indicator of the rapid rise of Asia-Pacific in the global travel industry is the massive scale of new orders for aircraft from airlines in the region.
In recent months AirAsia, Malaysia's low-cost carrier, has placed huge orders with Airbus Industrie for 200 of its A320 jets, and before that, India's IndiGo had confirmed an order for 180 of the same plane. And major Chinese airlines have also signed large deals for hundreds of the same Airbus aircraft.
Boeing, which has been left behind in terms of orders for new aircraft at recent air shows has, nonetheless, raised its forecast for commercial airplane sales over the next 20 years.
It is predicting that growth in air traffic within the Asia-Pacific region is likely to be an average of 7 per cent a year, well above the global rate. The projection for North America is for growth of 2.3 per cent and Europe 4 per cent.
The rapid expansion of aviation and travel in Asia-Pacific is inextricably bound to the region's phenomenal economic transformation.
The centre of gravity of the world economy is shifting more quickly than economists had predicted and indications are that China will overtake the United States as the world's number one economy before the end of this decade.
This explains Boeing's air traffic forecast, and the aggressive sales activity of Airbus in the region.