Transaction Volume Plummets

JLL said the Asia Pacific region is seeing a 60% decline in hotel transaction volume


Key points:

  • 60% decline in hotel transaction volume in 2020

  • US$14 billion in hotel investments last year

  • Expect 2020 to finish around US$4 billion


JLL said the Asia Pacific region is seeing a 60% decline in hotel transaction volume in 2020 post-Covid.


The region had close to US$14 billion in hotel investments last year, up 60% year on year but now through May, volumes of hotel deals in Asia Pacific are down by more than 60% to US$1.8 billion.


JLL’s Hotels & Hospitality Group expects 2020 to finish around US$4 billion, a year on year decline of more than 70% against the prior year peak. That is close to 2008 and 2009 following the global financial crisis when Asia Pacific recorded US$3.6 to US$3.9 billion in hotel sales.


JLL said some of this shows owners holding out on values to the extent they can while buyers are on the lookout for a deep correction. JLL said the silver lining is the supply pipeline will decline as some projects are put on hold and some are considered for alternative uses. This will give breathing space to owners.


Recovery could hover anywhere between 12 to 36 months from when “green shoots of recovery take place” which they believe could happen towards the end of 2020 though that hinges on each market’s characteristics. They are now describing the overall recovery scenario as being a bit more prolonged than its original anticipation of a swift V-shaped recovery.

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