Asia Pacific hotel performance continues to recover; ADR still pushing gains around the world while occupancy continues to lag

STR’s global “bubble chart” update through 15 April 2023 shows continued improvement in the Asia Pacific region and more than half of global markets with better than 20% growth in revenue per available room (RevPAR) versus 2019. Gains continue to be driven by average daily rate (ADR) while occupancy trails pre-pandemic comparables in most corners of the world.

Among all countries with room supply of more than 50,000 rooms, Israel, Switzerland, Singapore, Saudi Arabia, and France led in RevPAR on an actual basis. For Singapore, this most recent period was its fourth consecutive 28-day period in the top RevPAR group, as the country has led the Asia Pacific region in the metric since the start of 2023.

In terms of occupancy, Japan (77%) ranked second globally after Ireland as the country embraced the Sakura season in spring. The Netherlands and the United Kingdom also posted occupancy above 75% as both countries benefited from Easter holiday travelers.

Indonesia, Colombia, Tunisia, Poland, and Malaysia were the five countries with the lowest RevPAR, primarily due to lower domestic price levels. All five countries ranked at the bottom in terms of ADR, but only Tunisia was among the bottom five in occupancy. This means that these countries are not necessarily performing poorly. In fact, Poland and Colombia reported occupancy rates ranked 24th and 29th of the 48 countries, respectively.

Growth in RevPAR has been primarily driven by ADR throughout the pandemic-era as occupancy rates have been lagging in recovery. The latest 28-day period further supports this trend, as 10 countries recorded occupancy levels more than 20% behind their 2019 comparables. At the same time, only three countries recorded a decline in ADR.

Despite the fading impact of the pandemic on the hospitality industry, seven additional markets from the last version of this update reported RevPAR levels behind those of 2019 (15 out of 48 countries overall). Several of these countries are struggling to generate higher occupancy rates, with Germany and Vietnam reporting declines of 19% and 20%, respectively, compared to 2019.

At a market-level, a fluctuation in exchange rates has led to significant ADR growth in Egypt, Argentina, and Turkey. Excluding markets in those regions, the top five performing markets in terms of RevPAR included the Italian Islands, Hainan, Portugal Provincial, and Rio de Janeiro. Saudi Arabia, defined as a market for benchmarking purposes, also joined that group and benefited greatly from religious tourism.

Among the bottom five performing markets, two were from Europe, with Munich and Switzerland Northwest seeing their RevPAR down by 55% and 43%, respectively. Overall, 75% of markets posted RevPAR above 2019—that level has been steadily above 70% since the beginning of 2023.

As noted in a previous STR Weekly Insights, global performance is expected to show less movement with pandemic impacts fading off the calendar. The exceptions will continue to be Asian countries, especially China and Japan, due to a later reopening and pent-up demand hitting the market.