GlobalHotelNetwork.com: Where do you see the best opportunities for hotel investment or development?
Robert Hecker: China remains the “Big Show” for hotel development in the Asia Pacific region, accounting for over 70% of total development activity, but this entirely separate from the question of best investment returns!
For China, hotel development continues to be more for travel infrastructure and value enhancement for mixed-use projects.
For best investment returns, Japan tends to be most preferred, benefiting from continued low lending rates and strong market demand growth. Thailand continues to yield decent returns thanks to its endless attraction for tourists and perennially low labor/operating costs.
Vietnam has been a darling for new development the past several years, but a severe oversupply outlook is beginning to put a damper on resort development. However, Hanoi and Ho Chi Minh continue to look good for developers and investors thanks to Vietnam’s attraction as a manufacturing base, which has gradually been broadening into higher value/tech production.
Outside of Tokyo and Sydney, Singapore and Hong Kong remain the top cities of interest for hotel investors, but which are notoriously difficult to enter given limited opportunities and the high price tags involved when opportunities do arise.
Indonesia and the Philippines are the sleeper markets, which are expected to take off after the completion of their respective elections in April/May, supported by significant improvements in travel infrastructure supporting the opening of new resort destinations for international tourism. India is also starting to get more interesting.