The Asia Pacific hotel market presents the strongest optimistic outlook from investors among other regions in the next two years, according to a report by real estate services firm Jones Lang Lasalle (JLL).
JLL said of the surveyed investors, it was found that the Asia Pacific region received the most optimistic outlook for the next two years, followed by Europe, Middle East and Africa (EMEA), and North America.
JLL noted that while macroeconomic headwinds and new supply may challenge the region, boost in tourism by introducing new promotional acts would support demand growth in the hotel sector.
An example of this is the expected rollout of a 72-hour visa-free policy across numerous cities by the Chinese government, JLL said.
“Domestic visitation is expected to maintain its strong growth trend amidst enhancements to tourism infrastructure that should support demand growth moving, such as Shanghai Disney Resort, which is due to open in the spring of 2016,” said the report.
The report said investor sentiment for trading in the Asia Pacific hotel market fell, as positive investor expectation for the short term or for the next six months declined to 31 percent from the 58 percent recorded in the last survey.
However, for the medium term or for the next two years, expectations remained unchanged at 58 percent.
The report also found that the global hotel investor’s outlook for the next two years has shifted to 39 percent positive from the 61 percent positive recorded in last year’s survey.
JLL noted that this was due to recent market volatility weighing on some investors.
Positive short time expectations for North America in the short term declined to 41 percent from 66 percent last year, while investor sentiment for the medium term jumped from the 62 percent registered in the last survey to 32 percent.
“Global economic volatility and the relative strength of the U.S. dollar present an impediment to demand growth from international travelers,” said JLL.
It said lodging markets with a disproportionate share of international demand, such as New York and Miami, are perceived as being most at risk.
Meanwhile in the EMEA, the short-term expectations slumped to 22 percent from the 66 percent recorded in last year’s survey, while medium term expectations similarly declined at 39 percent from 73 percent last year.
“There are just three European markets where investors anticipate trading performance to decline over the next six months—Moscow, Istanbul, and Budapest,” the report said.
“Moscow continues to suffer from its fragile economy, political troubles, and sanctions, which have driven away many corporate guests, as well as the continuing devaluation of the Rouble,” said the report.