SINGAPORE, 18 July 2023: Asia Pacific hotel investment volumes declined by 51% year-on-year in the first half of 2023 as macroeconomic challenges and the rising cost of debt influenced capital deployment.
Coming off a high base in 2022 and despite supportive market fundamentals, hotel investments moderated to USD3.13 billion in the first half versus USD6.41 billion during the same period last year, according to data and analysis by JLL.
Activity during the first half was most robust in Japan (USD1.54 billion) and Australia/New Zealand (USD820 million), which grew by 56% and 189% year-on-year, respectively. Gateway markets such as Singapore (USD30 million) dropped by 95% year-on-year as the number of transactions declined. However, with the recent sale of PARKROYAL on Kitchener Road for USD388 million, the outlook for the second half of the year will be stronger. China (USD300 million) also saw activity moderate by 76% year-on-year. Despite strong performance metrics, activity in the resort sector was muted as assets remained tightly held.
“We have observed the impact of a continued disconnect between the robust tourism demand and macroeconomic and geopolitical challenges in the first half of 2023, resulting in a gap between sellers’ pricing expectations and buyers’ access to capital,” says JLL Hotels & Hospitality Group chief executive officer, Asia Pacific Nihat Ercan.
“However, trading performance of the sector remains strong, and other fundamentals, including tourism arrivals and high occupancy rates, provide us with full confidence that the current investment environment is externally-based, rather than industry-specific.”
Factors, including the recent reopening of China in January 2023, which was earlier than expected, fuelled existing travel demand strength. As a result, there has been a considerable improvement in trading performance, particularly in the upscale and luxury segments, supported by an increase in average daily rates (ADR) across the region’s hotels. Furthermore, according to JLL analysis, the rise in tourism arrivals since January 2022 has been predominantly driven by leisure demand, leading to continued growth in performance among hotels in the region, with occupancy rates leading to the recovery as more tourists return. Despite facing economic, health, and geopolitical challenges, the United Nations World Travel Organization (UNWTO) foresees the recovery in travel to continue throughout 2023.
Considering factors including the macroeconomic environment, project interest cycle, and broad investor interest in strong-performing assets, JLL has revised its full-year 2023 forecast to USD8.7 billion, down 24% from its initial 2023 estimate.
“Approaching 2024, we expect to see more specific opportunities emerge in some destinations across the Asia Pacific, where prices have been adjusted downwards, enabling interested parties to reconsider. Investors remain very committed to the Asia Pacific hospitality sector, and we see ongoing buyer appetite to invest in key markets and strategic assets, with the ability to deploy capital,” says Ercan.
About JLL
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in various commercial, industrial, hotel, residential and retail properties. A Fortune 500 company with annual revenue of USD20.9 billion and operations in over 80 countries worldwide, our more than 103,000 employees bring the power of a global platform combined with local expertise. For further information, visit
