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Asia-Pacific

Outbound Chinese Tour Groups Have Restarted

Alan Woinski
February 6th, 2023 at 7:46 AM EST

Skift Take

  • Tour groups from mainland China to 20 countries have restarted, 11 of which are in Asia Pacific.
  • Meanwhile, in China, hotels and restaurants are frantically searching for employees. During the first six days of work after China’s Lunar New Year holiday, job openings in the hotel and catering sectors surged 40% from the same period a year earlier.
  • Colliers Philippines said the average hotel occupancy rate in Metro Manila is expected to further increase to over 60% this year, driven by a higher number of domestic and foreign travelers.

Tour groups from mainland China to 20 countries have restarted, 11 of which are in Asia Pacific. This includes Singapore, Philippines, Cambodia, South Korea, Australia, New Zealand, Sri Lanka and Macau and Hong Kong. Countries that are not on the list include Japan, South Korea and the US. The battle already is fierce for these low-margin groups as some countries remain starved for tourism business and others want to further their progress with all types of business. Analysts at COTRI questioned this logic saying for most destinations and service providers, first-time travelers from lower-tier Chinese cities will create more problems than profit. That being said, there is a target of 200 million outbound Chinese tourists expected to be reached by 2028. That is a rather powerful number. As to how the competition will be, Hong Kong already announced they will be giving away 500,000 free airline tickets, not just for those in Mainland China but worldwide but first focused on the APAC region. Thailand has seen Chinese tourists gradually return to Bangkok’s Erawan Shrine but activity remains well below pre-pandemic levels. The Chinese made roughly 150 million trips abroad in the pre-pandemic year of 2019 with about 27 million being visits to six major Southeast Asian countries. The Lunar New Year did bring Chinese visitation to island resorts in Thailand and the Philippines. Airlines and hotels will welcome these group travelers. In Indonesia, they are hoping the easing of China’s group travel restrictions will raise occupancy rates at Bali hotels by 5 to 10 points from the current levels of around 60%.

Meanwhile, in China, hotels and restaurants are frantically searching for employees. During the first six days of work after China’s Lunar New Year holiday, job openings in the hotel and catering sectors surged 40% from the same period a year earlier. Passenger vehicle and freight truck drivers and airplane and train crews are also badly needed with job openings jumping 85.2% over the same period. Openings in tourism services industry grew 58.9% on the abandonment of the zero-Covid regime as well as on resurgent demand during the festival season.

Colliers Philippines said the average hotel occupancy rate in Metro Manila is expected to further increase to over 60% this year, driven by a higher number of domestic and foreign travelers. Colliers Philippines said the hotel occupancy rate in the National Capital Region may breach 60% this year. The expansion will be driven by the influx of more foreign visitors and continued growth from the local staycation market. Colliers also believes the resurgence of in-person events will lift demand for MICE facilities. Colliers sees the influx of more international tourists boosting tourism receipts, hotel rates and occupancies. They believe recovery should be supported by the modernization of more airports and the upgrading of road networks. Colliers said the hotel occupancy rate in Metro Manila grew to 55% in the second half of 2022, higher than 47% last year. ADR in Metro Manila hotels rose by 14.1%, way above the 8% projection. Colliers said ADRs for five star hotels stood at P11,148, a 33.3% increase from the previous year. Four star hotels’ ADR was up 10.4% to P5,229 while three start hotels were up 2.3% to P3,559. Colliers is projecting ADRs to rise about 6% in 2023.

Bulgari Hotels & Resorts announced the opening of the Bulgari Hotel Tokyo at 2-2-1 Yaesu, Chuo-ku on April 4. The new hotel will be the eighth in the Bulgari Hotels & Resorts collection. Upcoming openings include Rome this year, Maldives and Miami in 2025 and Los Angeles in 2026. The Tokyo Bulgari occupies floors 40 to 45 floors of the Tokyo Midtown Yaesu, an ultra-skyscraper in the Yaesu 2-Chrome North District. The tower is owned by Mitsui Fudosan Co. Ltd. and includes high-grade mixed-use offices and retail. The hotel has 98 furnished rooms and suites and includes the Bulgari Suite, measuring 400 square meters. Bulgari Suite is one of the largest suites in Tokyo and can be further extended by connecting it with an adjoining suite. The hotel includes a selection of restaurants and the Bulgari Bar on the forty-fifth floor. There are two Bulgari Ballrooms on the fortieth floor as well as a wedding salon and 1000 square meter Bulgari Spa and a Workshop Gymnasium.

Kotak Realty Fund, a property-focused private equity asset manager, has invested more than Rs 1,100 crore in hospitality company Bharat Hotels, owner of The LaLiT brand that operates luxury hotels, resorts and palaces across India. The fund is a part of Kotak Mahindra Group’s alternative assets management and investment advisory business Kotak Investment Advisors. This is the firm’s first hospitality company investment in more than 14 years. In 2007-2008, they invested in the parent company of Lemon Tree Hotels. Bharat Hotels has a portfolio of 12 luxury hotels, resorts and palaces and two mid-market segment hotels under The LaLiT Traveller brand offering 2,261 rooms. Kotak invested in the holding company of the hotel chain through its thirteenth real estate fund that achieved the first closure with a $500 million commitment from the sovereign wealth fund of Abu Dhabi Investment Authority. The investment will provide growth acquisition opportunities through buy-outs and management contracts with Bharat Hotels.

Indian Hotels Company announced the signing of its second hotel under the Ginger brand in Nagpur, Maharashtra. The brownfield project, a fully fitted lease, is slated to open in April 2024. The hotel is being developed in partnership with Prafulved Infra Pvt. Ltd. The 100-key hotel is strategically located at Wardha Road, Jaiprakash Napar, part of a mixed-use development, spread over the top three floors of an 11-story complex. The hotel will house Qmin, an all-day diner and a fitness center. With this hotel, IHCL will have 30 hotels across Taj, SeleQtions, Vivanta and Ginger brands across Maharashtra including 18 under development.

Regal Hotels International has launched Regala Hotels, a new hospitality brand. The first opening is Regala Skycity Hotel, located at Hong Kong’s new Skycity hub. The hotel includes over 1,208 guest rooms, three restaurants, a grand ballroom and two banquet halls, wellness facilities, children’s entertainment spaces, game rooms and more. Skycity is a new retail, dining and entertainment destination opening next to Hong Kong International Airport. The hotel is directly connected to AsiaWorldExpo and 11 SKIES within two minutes’ walk via the enclosed footbridge. Of the 1,208 guest rooms, 90 are suites. This gives Regala Skycity Hotel the largest number of guest rooms on Hong Kong’s Lantau Island. The third floor includes themed rooms, great for families with little kids. There is a Sky Deck, wellness facilities such as a Sky Gym, jogging track, and an organic farm.

A landmark hotel in the Southern Highlands in Australia has been sold following a highly competitive campaign. The four-star Links House Hotel in Bowral sold for circa A$6 million to a Sydney-based investment group. The hotel was sold via an Expressions of Interest campaign conducted by CBRE Hotels. The hotel features 17 guest rooms of various configurations, in addition to a fine dining restaurant and event facilities.

BWH Hotel Group plans to open eight properties in Thailand this year, one WorldHotels brand in Phuket and seven Best Western hotels. La Green Resort in Phuket will be the second property under WorldHotels in Thailand. Other projects this year include new locations in Bangkok under Best Western, named Best Western Chatuchak, Best Western Ratchada Hotel, Best Western Nada Don Mueang Airport Hotel and Best Western Click Sathorn 11. The other hotels are slated for Hua Hin, Chiang Mai and southern Thailand. Expansion of the WorldHotels collection in Thailand could happen in Koh Samui or Koh Phi Phi as well as converted properties in the Sukhumvit area of Bangkok. BWH said they plan to increase their room rates by 5% this year with the current rate surpassing the level charged in 2019. In 2022, properties under BWH Group increased room rates by 15% year on year while the occupancy rate nearly matched 2019. Asia Pacific properties only contributed 20% of the overall revenue, the slowest recovery of all regions.

Alan Woinski
February 6th, 2023 at 7:46 AM EST

Companies: Abu Dhabi Investment Authority, Best Western Hotels & Resorts, Bharat Hotels, Bulgari Hotels & Resorts, Ginger, Regal Hotels International, The Indian Hotels Company Ltd, WorldHotels Crafted

Locations: Australia, Bangkok, China, Japan, Maharashtra, Manila, Philippines, Phuket, Singapore, South Korea, Thailand, Tokyo

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