The region is waiting and watching as tensions rise between the giant Kaiju of the Pacific Rim.
The region is waiting and watching as tensions rise between the giant Kaiju of the Pacific Rim, namely China and the USA, over economic principles and regional control. A situation perhaps further complicated by China’s uncertain economic outlook. After many years of debt fuelled economic stimuli (estimated at around 12.5% of GDP during the GFC), debt today stands at 300% of GDP. Whilst such levels of debt are large for a normal country, China is somewhat unique. Its large asset reserves, sheer scale and central control structure mean that China will continue to drive growth in the region, including tourism numbers.
China’s growing wealth and middle class are reflected in the data, whereby only one city witnessed any significant decline in RevPAR (Seoul, -6.9%) and most cities grew (with the best performer being Hong Kong, +10.3%).
Within the construction sector, many countries are continuing to develop new hotels and have strong pipelines. China, however, has experienced massive growth in supply and the data would indicate that this trend may be topping out, with the scale of new development falling back.
The number of hotel transactions and corporate deals in APAC has been very strong, with Brisbane shining as a beacon of activity (with more than five deals in the last 12 months). In addition to investments across Europe and North America, active Accor has been gobbling up in APAC too, with an investment in Mantra Group.
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