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The demand for tourism is rebounding as borders progressively open up in Asia. Besides the pent-up demand the pandemic has created, the international tourism frenzy is being fueled by favorable exchange rates and tourists’ desire for more than just domestic travel.
Research undertaken by CBRE indicates that operating performance in the hospitality sector is approaching pre-pandemic levels in Asia. The average daily rate (ADR) – occupancy and revenue per available room – is trending higher in all Asia-Pacific markets, with a regional recovery to pre-pandemic levels expected by 2024. ADR in Singapore, for instance, is 5 percent higher than it was in July 2019, based on data from hospitality analytics firm Smith Travel Research.
Such returns are attracting further investment in the hospitality sector in the Asia-Pacific region. Investment in hotels in the Asia-Pacific region rose to $10.1 billion in 2022.
Impact
Such strong demand has caused ticket prices and hotel rates to soar. While the airline industry faces a labor shortage, similar shortages are hitting other parts of the hospitality sector. The massive layoffs of 2020 resulted in a number of hospitality workers retooling themselves in other industries. With lingering health and safety concerns, the spike in demand has not been attractive enough to persuade some to return to this industry, especially since the taste of retrenchment is still fresh.
In response, the hospitality sector is finding creative ways to help attract employees. Some of these strategies, for example, cross-training, enable the hotels to cross-deploy and fill gaps in departments that are short-staffed while giving these employees a wider range of deployable skills. But according to many, this still might not be enough.
- The post-COVID-19 hospitality rebound is attracting investment to Asia.
- It is also revealing labor shortages that may be hard to fix.
- AI may help to address the shortfall and personalize the consumer experience.