According to Jones Lang LaSalle Hotels, Thailand, Indonesia and the Maldives are the next hotel investment markets to watch in the Asia Pacific region in coming years.
"We are seeing fantastic potential coming out of Thailand, Indonesia and the Maldives, backed by rising RevPAR (revenue per available room), healthy investor interest and solid travel demand. While hotel transactions in Asia and globally have slowed in the last year, investor sentiment remains strong for the right prospects, and these are markets are showing the greatest opportunity for capital value growth," said Tom Oakden, Executive Vice President of Investment Sales at Jones Lang LaSalle Hotels.
With 20.5 million foreign arrivals expected for 2012, Thailand is arguably Asia's most resilient market having bounced back from a number of natural disasters and political disturbances. RevPAR is climbing in Bangkok despite new hotel supply, while resort markets like Phuket are exhibiting stronger income growth potential. Most importantly, where the market was once dominated by domestic players, Thailand is becoming increasingly attractive to overseas investors - with greater liquidity as a result. For instance, Thailand has seen five major hotel deals in the last 18 months - including the Mövenpick Phuket, which was the country's largest open market hotel transaction to date, brokered by Jones Lang LaSalle Hotels.
Neighboring Indonesia is also seeing strong demand, with a tourism base of around 17.5 million domestic visitors and 5.2 million international visitors across its major airports (as of June 2012, year-to-date). Bali and Jakarta have traditionally dominated foreign investor interest, but this is diversifying to other regions, with overseas investors looking at more unique opportunities. Lack of new stock is a challenge, although latest Jones Lang LaSalle research indicates that investors are preparing to sharpen yield expectations. This, coupled with exceptional year-to-date RevPAR growth, may well close the gap between the pricing expectations of buyers.
The Maldives has broadened its appeal beyond honeymooners with a healthy influx of Chinese visitors arriving in the island destination in the last three years. From an investment perspective, the Maldives commands one of the highest ADRs (average daily rates) globally and, given the 'one island, one resort' concept, guest capture for food, beverage and other income sources is likewise high. Government policies on foreign investment have also relaxed in the Maldives, allowing leases to be extended for 50 year terms. Compared to other markets, the Maldives offers attractive returns and whilst RevPAR growth figures were affected by negative publicity in the early months of the year, these have rebounded strongly with August showing double digit RevPAR growth.