Marriott, Accor and Others Look to Asia-Pacific With Major 2021 Openings

Asia openings 2

Global hotel companies are making a big bet on the Asia-Pacific region with a slew of openings slated for 2021.

Marriott International expects to open around 100 properties in the area with a strong focus on Greater China. Other countries seeing expansion include Japan and Australia.

“We are grateful for the continued resilience and positivity demonstrated by our associates and for the confidence our guests, owners and franchisees continue to have in us. We remain well-positioned to meet the travel demands of our guests across Asia Pacific and the rest of the world,” Craig S. Smith, Group President, International, Marriott International said.

Marriott’s plans cover a wide range of its brand portfolio and it expects to hit a landmark 400th hotel in Greater China and 50th in Shanghai when the of JW Marriott Shanghai Fengxian throws open its doors in spring.

Marriott isn’t the only company targeting the region. InterContinental Hotels Group is opening Voco Melbourne Central later this year and is also bringing its Even hotels brand to the Nanshan district of Shenzhen in China. There are also scheduled openings at established names like Holiday Inn and Crowne Plaza.

Accor too has a number of key properties launching, including in its luxury segment with new Sofitels coming to Seoul, Hangzhou, and Adelaide.

Meanwhile, the Radisson Hotel Group is coming off the back of a year where it signed 84 properties across eight brands in the Asia Pacific region and has big plans for the future.

Over the next five years it wants to triple its portfolio through a mix of organic growth in key markets, such as China, India, South East Asia, Australia and New Zealand, and master brand development agreements with majority shareholder Jin Jiang International and its subsidiaries in China.

Containing the Pandemic

While most of these openings will have been planned well in advance, pre-pandemic, the way the region has dealt with the public health emergency has meant that brands have been able to place a greater emphasis on a successful roll-out. The United States and much of Europe is still dealing with a resurgence of the virus with many countries such as the United Kingdom opting to shutdown hospitality, meaning even domestic travel is off the agenda at the moment.

In contrast, China, which was at the epicentre of the outbreak, has bounced back with the economy growing 2.3 percent last year and New Zealand, Australia, Taiwan and Vietnam have all managed to contain their outbreaks.

This competent handling of the crisis, strong domestic tourism and favourable demographics put the region in a particularly strong position.

“Asia has a number of countries, such as China and Japan, which enjoy exceptionally strong domestic demand. These factors combined have triggered operator interest and boosted investor confidence to sign and open new hotels, unlike in many other regions where ‘wait-and-see’ attitude prevails,” Tea Ros, Managing Director at Strategic Hotel Consulting, said.

Hospitality Insights’ latest Investor Sentiment Assessment survey, covering the fourth quarter of 2020, showed a high degree of investor optimism with 90 percent of respondents expecting economic conditions to improve over the coming year and 80 percent expressing a positive outlook for the hotel  market.

A separate survey by the Colliers Global Capital Markets team found that 62 percent of investors were relatively confident that this year would see a mild rebound though there are concerns about economic weakness and travel restrictions.

“The new year finds much of the APAC region already firmly in recovery mode, with the Chinese economy picking up rapidly and countries like Australia and Singapore proving largely successful in their efforts to contain the pandemic and benefitting from robust support measures by governments and policymakers,” the authors of Colliers’ 2021 Global Investor Outlook said.

Hotels might not necessarily be the asset-class of choice in the region with offices and logistics/industrial assets seen as being more popular. However, for both owners and operators the prospect of at least some domestic and regional travel is something to be cheered.

Brand Building

Although the pandemic saw international travel largely disappear, it may end up accelerating changes that were happening anyway, changes that are likely to benefit the big brands.

As countries start to open up business and leisure travellers are going to be much more conscious of the hygiene standards of the hotels in which they choose to stay. The standardization applied by the big-name brands can only help.

But irrespective of the pandemic this shift towards branding was happening regardless.

"There is an ongoing shift towards branding in APAC as owners want that assistance in navigating an increasingly complex and global distribution world,” Richard Clark a senior analyst covering the global hospitality and leisure industry at Bernstein said.

Demographic changes also make the region attractive for hotel investors.