The hotel industry in the Asia Pacific (APAC) is forecast to continue its post-pandemic recovery in 2025, albeit at a more modest pace compared to previous years.
This measured recovery reflects a combination of persistent economic headwinds, evolving travel patterns, and market-specific factors shaping performance trends across the region. The moderation in growth can also be attributed to the normalization of pent-up demand seen in 2024.
As travel patterns stabilize, the dramatic surges in occupancy and average daily rate (ADR) observed during the initial recovery phase are likely to taper off and return to more sustainable growth levels.
While overall performance is on an upward trajectory, certain markets in the region may begin to moderate in 2025. For example, Singapore has recorded a plateauing of ADR growth in recent months as supply additions and the stabilization of demand limit further price increases.
Similarly, the Maldives, which recorded exceptional ADR growth during the peak recovery period, has started to experience declines as competition intensifies and travelers diversify their destination preferences. Conversely, emerging markets such as Vietnam and the Philippines are expected to maintain robust performance due to ongoing infrastructure development and aggressive tourism campaigns. These markets are capitalizing on increased air connectivity and targeted efforts to attract diverse traveler segments, including digital nomads, adventure seekers, and luxury tourists.
Travel to the APAC region is projected to remain high in 2025, supported by sustained interest from key source markets such as China, the United States, and Europe. China’s reopening has been a critical driver of this demand, with outbound travel expected to exceed pre-pandemic levels.
However, due to weak domestic demand and economic headwinds, the Chinese government's stimulus programs on consumption will be pivotal in determining the tourism sector's trajectory for the year ahead. The increased availability of direct flights, competitive airfare pricing, and relaxed visa requirements in countries like Thailand and Japan are further bolstering the region’s attractiveness.
Demand will continue to be fueled by both leisure and business travel. The return of large-scale events, conferences, and exhibitions will significantly contribute to this trend, especially in gateway cities with well-established MICE (meetings, incentives, conferences, and exhibitions) infrastructure. Air-traffic growth will be a key enabler of increased demand for the APAC region in 2025.
The rapid expansion of low-cost carriers and the resumption of long-haul routes by full-service airlines are expected to enhance connectivity to secondary cities and emerging destinations. Moreover, major airports across the region—including Singapore Changi, Tokyo Haneda, and Bangkok Suvarnabhumi—are undergoing capacity upgrades to accommodate higher passenger volumes.
The Asia Pacific hotel industry in 2025 is poised for continued recovery, albeit at a more moderate pace compared to the initial rebound phase.
While certain markets may experience stabilization or slight declines, the region’s overall outlook remains positive due to sustained travel demand, government initiatives to boost tourism, and robust air-passenger growth, barring any macroeconomic uncertainties or natural disasters.
Strategic investments in infrastructure and targeted marketing efforts will be crucial to sustaining this recovery and positioning the APAC region as a leading global tourism hub.
For more information about the Asia-Pacific region or for help making informed investment decisions that align with your goals and risk tolerance, please contact Hok Yean Chee.
Hok Yean CHEE is President of HVS Asia Pacific. She has 30 years of experience in more than 30 markets across 19 countries in Asia Pacific and has provided real estate investment advisory services for a wide spectrum of property assets. Her forte lies in providing investment advisory on hotels and serviced apartments including brokerage, strategic analyses, operator search, market feasibility studies, valuations, and litigation support.
Hok holds a bachelor’s degree from the National University of Singapore and a Certification in Real Estate, Development, and Hotel Investment from Cornell University.
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