Full-year Asia-Pacific hotel investment volumes in 2024 are anticipated to grow by 4.3% on 2023, which totalled US$11.7 billion, finds the analysis by property advisory group JLL. In the first nine months of 2024, cumulative transaction volumes totalled US$9.05 billion, tracking up 15% year on year (US$7.87 billion in 2023) and representing 90% of the volume of 2019.

Led by Japan, cross-border investment surged, year to date to September, driven by large transactions in Asia, while Australia experienced a rare lull in annual activity.

Average daily rates in the Asia-Pacific region are up 19% in local currencies versus the last cyclical peak in 2018-2019, JLL analysis confirms. Furthermore, most markets still have room to increase occupancy back to the same pre-pandemic highs, given strong business travel offsetting some pull back in leisure travel.

Concurrently, the last leg of occupancy, JLL believes, may take longer to come back with MICE – meetings, incentives, conferences and exhibitions – still slower to return, and mainland China still facing lingering economic issues in the short term, influencing overall industry performance.

On a country-basis, investment volumes were generally positive in the first nine months of 2024, with a few exceptions across the Asia-Pacific region.

Japan

In the first nine months of 2024, Japan further established itself as the most attractive hotel market regionally. Activity through the end of September resulted in sales volumes at US$3.8 billion. Given that investor interest is unlikely to wane, JLL forecasts total sales of US$4.7 billion for 2024, followed by an increase of 4% in 2025 at US$4.9 billion.

Despite the recent interest rate hike and slight appreciation of the yen, JLL anticipates Japan hospitality investment to remain active given the strong underlying supply and demand fundamentals.

China

Investment in mainland China’s hotel space totalled US$1.8 billion as of end Sep 2024, reflecting a 6.4% growth from the previous year. Shanghai and Beijing remained the most actively traded hotel investment markets, accounting for over 50% of total transaction volumes.

In terms of buyer profile, high-net-worth investors are still one of the more active buyers of hotel assets. The market momentum will likely continue into the last quarter of 2024, with total hotel transaction volumes to reach US$2.1 billion for the full year.

Australia

Australian sales volumes, JLL suggests, will remain relatively subdued over 2024. Year-to-date volumes have totalled US$629 million (settled), down 38% from the same period last year.

Total transaction volumes, JLL estimates, should reach approximately US$1.1 billion for the full year, which is below the long-term average, but likely influenced by the fact that many 2024 transactions could also be classified as ‘last year’ deals.

Korea

Hotel transaction volumes reached approximately US$1.1 billion in 2024 year to date, with the Conrad Seoul comprising the largest transaction. Several additional hotels are expected to transact before the end of the year, according to JLL, resulting in estimated transaction volume near US$1.3 billion for the full-year 2024.

Singapore

With a tourism industry firing on all cylinders, supported by mega events and high occupancy rates, Singapore’s attractiveness to investors has remained justifiably high. Deals recorded in 2024 have eclipsed the previous year’s total, leading JLL to project cumulative hotel investment volume for the full year to be approximately US$1 billion.

Hong Kong

Hong Kong remains an active market, but buyers have become more selective, opting for city centre hotels in prime locations. Volumes in 2024, JLL forecasts, will total approximately US$500 million, roughly 35% below 2023 levels. Given that this year’s prevalence of wide bid-ask spreads is expected to moderate and tourism in Hong Kong is poised to pick up further, 2025 is projected to see more investment activity.

India

Transaction volumes have multiplied from US$76 million in 2022 to US$337 million in 2023 and is forecast by JLL to land at US$440 million this year. Capital has been supported by the sector’s robust performance in room rates, revenue and occupancy levels.

Outside of investment, development interest remains strong with hotel brands having signed agreements for approximately 19,500 new hotel rooms in the first half of 2024, accounting for 77% of the total number signed in 2023 in emerging metros.

Thailand

Investment volume dropped in 2023 due to a wide bid-ask spread and rising interest rates; however in 2024, there has been a remarkable recovery in investment activity. Year-to-date transaction volumes stand at US$404 million, with a projected full-year volume of over US$450 million.

Next year will be on par or better with the 15-year average of US$300 million in transactions, JLL anticipates, bolstered by expected lower interest rates and positive tourism sentiment from visitors around the region.

Going foward

“A combination of broader economic factors, including a positive macroeconomic outlook regionally, supportive interest rate policies and solid consumption factors give us confidence that full-year hotel investment will comfortably eclipse last year,” says Nihat Ercan, the CEO of JLL Hotels & Hospitality Group for Asia-Pacific. “Investors have consistently shown an appetite to play larger in the hotel sector in Asia-Pacific; and we see no signs that activity will wane in the last quarter of 2024, making us increase our investment volume forecast to US$12.2 billion.”

“Factors, including the fluctuating currency exchange against the dollar, have helped attract foreign investors since H1 2023. The welcome surge in strong tourism fundamentals in the region since the reopening of borders to international travel has also helped bolster investor appetite. Although there are some markets that may see some short-to-medium term easing of occupancy, the overall industry has entered a new phase less defined by recovery and more linked to ideas of organic and sustainable growth.”

The Asset