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Asian hotel rates take a dive

Hotels in the Asia Pacific region have seen a dramatic decline in room rates in 2013.

According to the latest data from STR Global, provided exclusively to Travel Daily, average daily rates (ADR) in the region have plummeted 11% in the first two months of this year, compared to the same period in 2012.

Taking the two months together, and therefore negating the seasonal impact of Chinese New Year, hotels in Asia Pacific region saw their ADR drop from US$149.42 in January and February 2012 to US$132.95 in the corresponding period this year. And while occupancy levels have seen a marginal improvement, rising 0.6 percentage points over the same period to an average of 63.3%, this has not been sufficient to offset the declining ADR. Revenue per available room (revPAR) has fallen by 10% – almost US$10 – from US$94.45 in the first two months of last year to just US$84.88 this year.

Much of the regional decline stems from India, where hotel rates in key cities continue to fall from previously astronomical levels. In Mumbai ADR fell 12.3% to US$151.86 in the first two months of the year, while in Delhi the drop-off was even sharper, as rates fell 17.1% to US$141.89. Occupancy levels also dipped in both cities. But the situation is also driven by China, where huge amounts of new hotel supply are entering the market. In Beijing, both occupancy and ADR fell in the first two months of the year, causing a 5.3% drop revPAR, which remains well below the regional average at just CNY314.20 (US$50.04).

Singapore, where hotels have performed consistently well in recent years, has also seen a slight dip in performance in 2013, with occupancy (-1.7 percentage points to 82.1%), ADR (-0.8% to SG$235.85) and revPAR (-2.8% to US$193.66) all falling. In all three areas however, Singapore’s hotels remain well above the regional average, as do those in Hong Kong, where performance remained almost unchanged in the first two months of the 2013, compared to the same period in 2012.

One city that has seen a strong resurgence however, is Bangkok. Recovering from after-effects of the 2011 floods, the Thai capital’s average occupancy jumped 8.9 points to a strong 80.1%, while ADR increased 10.6% to US$110.39. This allowed revPAR to surge 24.6% to US$88.46.


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