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Coronavirus: Hotel performance impact around the Asia Pacific region

Previous analysis articles: SARS hotel performance recovery, Europe airport hotel analysis, Mainland China analysis

In this latest hotel performance analysis around the outbreak of coronavirus (COVID-19), we look at the impact in key Asia Pacific destinations for Mainland China travelers. 

Using Tourism Economics’ global top 20 for Mainland China outbound travel, we analyzed 14 markets, some of which have seen a strong impact, many showing a moderate impact and some markets that have remained stable. 

Markets included: Hong Kong SAR, Macau, Singapore, Taiwan, Australia, South Korea, Cambodia, Indonesia, Bali, Malaysia, Myanmar, Philippines, Thailand and Vietnam. 

For the purpose of this analysis, we examined performance in the two weeks prior to Chinese New Year (6-19 January), the week of Chinese New Year (20-26 January) and the three weeks that followed (27 January-16 February). The weeks immediately after Chinese New Year have historically still included holiday travelers around the region. 

Please bear in mind that many of our ongoing reports on the performance impact of COVID-19 are based on daily data, which may differ from the total monthly numbers you will see at a later date. Given the extraordinary circumstances, we believe it is important to update you more frequently with preliminary data rather than wait for full-sample information. We omitted Japan from this prelim analysis due to differences in daily and monthly samples for that market. Japan will be covered in full monthly reporting down the road.


In general, we see high levels of occupancy the week before Chinese New Year, with hotel performance reflecting the push to complete business travel ahead of the holiday and school closings. For the week of Chinese New Year, we see a drop in occupancy, except in those markets which are popular holiday destinations for the Chinese traveler, notably Cambodia, Thailand and Australia


In markets with hotel performance most impacted by the virus, we see an almost immediate decline in occupancy levels. Already a low business travel period due to the holiday, significant drops in occupancy were noticeable in the wake of the World Health Organization’s 30 January announcement of a global health emergency. Macau in particular suffered as casinos were forced to shut down for a 15-day period. These casinos were reopening on 20 February, and Macau has not reported any new cases of the virus since 4 February. With these factors in mind, the destination could see a slight demand return in the near future—even if restrictions around pubs and bars remain in place.

Hong Kong, already suffering from a political crisis, saw occupancy levels drop even further. Singapore, a popular destination for leisure travel, shopping and business, had seen lower performance even before the national risk assessment system was raised on 7 February to the second-highest level (orange) for the first time since the H1N1 alert in 2009.

For those more moderate impact markets, we see consistent occupancy declines beginning with the week of Chinese New Year. The new and lower levels for these markets are in line with what was seen after the global financial crisis in 2009. 

For those markets with more stable occupancy, less dramatic declines are partially due to distance from Mainland China, volume of visitors, stronger domestic or diverse travel drivers and a reasonably solid level of continued airlift. Australia was already off to a quiet start in 2020 due to the bushfires in several populated states in the country. 

Average Daily Rate
Due to different currencies across the markets examined, we measured ADR on an index basis. We indexed to the week of 13-19 January (in U.S. dollars) and measured movement from that point. Macau was an obvious exception, as we saw an unusual spike the week after Chinese New Year during the aforementioned casino shutdown. 


As expected, the markets most closely aligned to Mainland China saw the biggest drop in ADR over the last few weeks, with Hong Kong hitting low numbers not seen for well over a decade.

It may not come as a surprise that Thailand, a historically resilient market, is able to maintain reasonable rate levels during this demand drop, but we are seeing similar trends across other key ASEAN markets. This speaks to the transparency and rationale of changed travel patterns—everyone is aware of exactly what is causing the drop in demand and also which customer group is missing. This clarity makes it easier for accommodation providers to assess rate strategies.

Markets like Australia and Indonesia are affected, but in a different sense. Australia is affected from a macroeconomic point of view due to its increasing business ties with China, tourism, education and other areas—but performance-wise, it’s holding up well, considering that it was already under supply pressure in key markets, along with five months of raging bushfires.

Indonesia feels some occupancy and rate impact in Bali, a popular market for Chinese travelers now gone, but not at the same serious levels as elsewhere. In addition, Jakarta and other key markets remain much less affected as main drivers are domestic travel, and the country are still not seeing any reported COVID-19 cases.

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