Thailand’s pristine beaches and resorts recently reopened to tourists for the first time since the onset of the pandemic, spurring a shot of optimism for the hotel sector in the country and beyond, bolsters optimism among hotel investors in the region.
The tourism-reliant economy reopened its borders to international travel this month, waiving mandatory quarantine measures for travellers from more than 60 countries and territories.
Authorities are expecting a slow recovery, with 10 to 15 million visitors expected in 2022, down from some 40 million before the pandemic in 2019. Still, it’s being taken as a positive sign for the hotel investors hunting for opportunities amid pent-up demand, says Mike Batchelor, CEO, Asia Pacific, JLL Hotels & Hospitality Group.
“Thailand has been Southeast Asia’s most active investment sales destination this year,” he says. “The projected recovery in leisure demand, following the recent reopening, is a timely boost of confidence for investors that the tide is finally turning in the pandemic.”
Last year hotel investment dipped alongside other real estate sectors amid general caution around the global economy. But signs of recovery pushed up investment volumes globally in the first nine months of this year.
In APAC, hotel investment volumes are expected to cross US$7 billion this year and US$9 billion in 2022, compared to US$14 billion in 2019, according to JLL’s Hotel Investment Highlights 2H21 report.
One of the largest deals recorded in the region this year was Kintetsu Group Holdings’ US$550 million sale of eight Japanese hotels to US investment fund Blackstone Group.
Resurgence in key resort markets
While the top three markets — China, Japan, and Australia — accounted for more than two-thirds of transactions in Asia Pacific this year, leisure travel destinations such as Thailand and Maldives are also seeing an upswing in interest from investors looking to take advantage of the post-Covid travel recovery.
In October, Hawaii-based premier beach-resort brand Outrigger Hospitality Group acquired three beach resorts under Manathai Hotels & Resorts in Thailand to expand its portfolio in the Asia-Pacific region.
Within the same month, Italy-based luxury resort group Emerald Collection extended its investment foray in Asia Pacific with its purchase of the Faarufushi Maldives resort from Maldivian hospitality operator Universal Enterprises.
“In our interactions, buyers are viewing the external backdrop as the start of a new investment cycle for the hotels space,” says Nihat Ercan, Senior Managing Director, Head of Investment Sales, Asia Pacific, JLL Hotels & Hospitality Group.
Global private equity players, as well as corporate and high net worth (HNW) investors from the Middle East, have become more engaged in leisure travel destination markets, based on JLL’s research.
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