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STR: Global Hospitality Trends

19 Dec. 2017
Central/South America
This year to date, hotels in Rio de Janeiro have seen substantial performance declines, following an immense build-up in supply for the 2016 Summer Olympics. The September Rock in Rio music festival significantly boosted the market’s performance, with a RevPAR (revenue per available room) premium of 279%, compared with the rest of the month. As the Colombian government’s 2003-2017 tax-break incentive for hotel development draws to a close, the country has experienced an influx in new supply in recent years. Colombia’s year-to-date performance actually shows encouraging signs, considering the recent supply expansion. Occupancy levels have been healthy, especially in Bogotá, which has offset the decline in rates. The country’s performance was strong in both 2015 and 2016, primarily driven by rate growth, so we may be seeing a bit of a levelling off. The country’s June peace settlement with Farc rebels could help stimulate hotel demand in the long term.Rock in Rio 2017
 
Middle East/Africa
The Middle East faces two major factors impacting hotel performance: oil prices and supply growth. STR has identified a clear correlation between the decline in the price of oil and the downturn in hotel performance and profitability in the Gulf region over the past few years. Dubai has experienced substantial supply growth in the build-up to the 2020 Expo, and there are nearly 27,000 rooms currently under construction. It has become increasingly important for these Gulf Cooperation Council (GCC) markets that are heavily reliant on oil to supplement the loss in corporate travel through further developing leisure attractions. We have seen this long-term investment in Dubai and also in Saudi Arabia with the government’s 2030 Vision. Most major markets experienced declines during Ramadan this year in comparison with Ramadan a year ago.Across Africa, we’ve seen mixed performance results this year to date. In local currencies, rates are up in several countries, including Egypt, Morocco and South Africa, but in many instances, exchange rates need to be considered to get the full picture. Some other markets are experiencing performance declines as a result of supply growth, such as Nigeria, Ethiopia and Algeria.Ramadan 2017Asia Pacific
Three of the five cities with the highest number of rooms in the pipeline are currently in China (Shanghai, Chengdu and Beijing). Meanwhile, Hong Kong has seen considerable occupancy growth this year. Data from the Hong Kong Tourism Board show that arrivals from Mainland China increased 1.9% for the August year-to-date time period. Singapore’s occupancy for the month of August improved in comparison with the same period a year ago, which came amid concerns about Zika cases in the country. However, average daily rates (ADR) declined for the 18th consecutive month, primarily due to economic struggles in the country. Down under, hotels in Australia reached their highest absolute levels in occupancy, ADR and RevPAR for any H1 on record. The country welcomed over 4.2 million international visitors during the first half of 2017, a 7.2% increase compared with H1 2016, according to the Australia Bureau of Statistics.
 
STR
About the author

STR provides clients from multiple market sectors with premium, global data benchmarking, analytics and marketplace insights. Founded in 1985, STR maintains a presence in 16 countries with a corporate North American headquarters in Hendersonville, Tennessee, and an international headquarters in London, England.