The survey uncovered a strong desire among investors to increase their hotel investment allocations in Asia Pacific, with respondents retaining an optimistic view towards hotel performance for the next 12 months after a landmark year for investment. Whilst the interest rate cut cycle is now underway in many major markets, investors are awaiting greater certainty on the magnitude of future cuts before committing to significant investment decisions outside of Japan.
After a period of strong investor activity in the luxury sector, some of that interest has shifted toward the upscale and upper midscale segment. Investors are looking more closely at value-add investment strategies, with rebranding and redevelopment opportunities in this segment seen as attractive in the current market at a time when the cost of new development remains high.
While investment activity is expected to stay robust, well-located high-quality hotel assets in key markets will remain keenly sought after. Expectations of continued growth in mainland Chinese outbound visitors; further room for hotel occupancy improvement; as well as increasing institutional investor interest should help counteract some of the current headwinds.
