Hok Yean CHEE of HVS reports that the Asia Pacific hotel market in 2025 shows signs of cautious optimism, with a slight decline in transaction volumes but resilient travel demand and selective regional growth. While China, Japan, and South Korea remain the most active markets, infrastructure projects and upcoming hotel openings across the region indicate potential growth.
Overview of Hotel Transactions in Asia Pacific
In 2024, the Asia Pacific region saw hotel transaction volumes reach approximately USD11.5 billion, marking a 3% decrease from the previous year. This decline is a significant improvement over the 14% drop experienced between 2022 and 2023. The slowdown is attributed to elevated borrowing costs, prolonged transaction timelines due to cautious due diligence, and macroeconomic uncertainties. Despite these challenges, the narrowing pace of decline, coupled with resilient travel demand, suggests a cautiously optimistic outlook for investors.
Key Markets: China, Japan, and South Korea
China, Japan, and South Korea have emerged as the top three most active markets in the region. China experienced a 54% year-on-year decline in transaction volumes to USD2.1 billion, reflecting a cautious domestic investment environment. In contrast, Japan witnessed a 15% increase in transaction volumes, reaching USD3.5 billion, driven by strong inbound tourism and yen weakness. South Korea also recorded a 25% year-on-year increase in transaction volumes to USD1.7 billion, highlighting selective confidence in the hospitality sector.
Major Investors and Transaction Trends
In 2024, the top ten investors in the Asia Pacific accounted for approximately USD5.1 billion or 29% of the total transaction volume. Notable investors included China-based Hillhouse Capital, US-based KKR, and Japan-based Mizuho Leasing. This diverse mix of domestic and cross-border investments reflects opportunistic acquisitions and portfolio-driven strategies.
Hotel Performance Across the Region
Hotel performance in the Asia Pacific region in 2025 presents a mixed but stabilizing picture. India, Japan, and Vietnam stand out as strong performers, with cities like Delhi, Mumbai, Bengaluru, Osaka, and Ho Chi Minh City registering solid RevPAR gains. Mature markets such as Singapore and Hong Kong maintain high occupancy levels, while resort markets like the Maldives and Langkawi benefit from rate-led growth. However, Thailand faces challenges with softer demand affecting Bangkok and Phuket.
Infrastructure Developments and Future Prospects
Significant infrastructure projects are underway across the region, promising to enhance connectivity and support the hospitality sector. Notable projects include the Melbourne Metro Project in Australia, the Pudong International Airport expansion in China, and the Kansai International Airport renovation in Japan. These developments, along with upcoming hotel brand openings, indicate potential growth opportunities.
Conclusion
The Asia Pacific hotel market in 2025 reflects a cautiously optimistic outlook, with selective regional growth and infrastructure developments supporting future prospects. While challenges remain, particularly in China and Thailand, the region’s diverse markets and ongoing investments provide a foundation for sustained growth.
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