According to Jones Lang LaSalle Hotels' latest Hotel Investment Sentiment Survey, Asia Pacific currently offers hotel investors a diverse range of opportunities with a variety of risk return profiles.  Where a number of markets in Asia Pacific are boasting income growth, others present development potential and many are expected to benefit from an influx of Chinese visitors. The survey, which targets the world's 2,000 largest investors and owners of tourism properties, is the only global survey of its kind.

"Asia Pacific investors remain resoundingly positive about trading performance in the short to medium term," said Mr David Gibson, CEO, Jones Lang LaSalle Hotels.  "All but two of the 25 major Asia Pacific markets are forecasting growth in average daily rate (ADR) and occupancy," he continued.

On the back of a sustained recovery in tourism, investor intention across Asia Pacific remains weighted towards the hold sentiment, while investor sentiment to buy has bounced back.  "With a continued recovery in international visitors and a belief that trading performance will improve, investors perceive now as being a good time to enter the Bali market," said Mr Gibson. He continued, "The tightly held market of Melbourne, which is poised to benefit from an improving market, may also hold opportunities for buyers seeking a hotel investment."  Stronger occupancies, the long awaited end to the current new supply cycle and the 2006 Commonwealth Games are factors contributing to expectations that Melbourne is likely to see modest ADR growth through 2005 and strengthening in 2006.

According to the survey, investors are keen to build in the Indian cities of Mumbai and New Delhi.  "The Indian markets are expected to continue to benefit from the strength of the financial services and outsourcing sectors respectively, whilst still offering attractive yields," said Mr Scott Hetherington, Managing Director Asia, Jones Lang LaSalle Hotels.

Investment Yields Retrace

Hotel investors are not willing to reduce their yield expectations any further.  "In fact, the average capitalisation rate requirement for hotel acquisitions across Asia Pacific has backed up slightly to 10%,"said Mr Hetherington.

In most cases, investors expect little change, albeit a slight drop, in capitalisation rates over the short term.  "Singapore is expected to benefit from limited new supply in the medium term whereas Macao and Hong Kong will benefit from an increase in outbound travel from China," said Mr Gibson.  China itself remains highly sought after, however investors are taking a more cautious approach than indicated in previous surveys.

Trading Performance Remains Positive

Investors remain optimistic that trading performance over the short term will be strong for the markets of Brisbane, Sydney and Shanghai.  "Over the medium term, the survey reveals Macao remains a favourite; a market that will boast some of the finest casinos, hotels and convention centres in the world," said Mr Hetherington.  Investors are also confident New Zealand's major city of Auckland will experience growth over the medium term.  "Since the launch of the 100% New Zealand campaign five years ago and exposure received from The Lord Of The Rings trilogy, New Zealand has experienced a 50% increase in international visitor arrivals," said Mr Gibson.