The APAC Hotel Recovery in Focus

While much of the global hospitality sector remains in flux, Asia-Pacific’s hotel industry is carving its own path—one defined not just by rising revenues but by sharper operational choices. The latest regional figures reveal a complex picture of recovery, where topline growth, margin management, and cost strategy are inextricably linked.

Figure 1

Oceania continues to lead the APAC region in Total Revenue per Available Room (TRevPAR), maintaining a consistent advantage over South Asia—despite the latter’s contrasting internal dynamics, from high-yield leisure destinations like the Maldives to cost-sensitive markets like India. This rolling 12-month view highlights both the strength and diversity of the region’s recovery, underscoring why revenue trends alone don’t tell the full profitability story.

Across APAC, Total Revenue per Available Room (TRevPAR) has been on a steady upward track, based on a 12-month moving average in USD. That’s good news for hotel owners and operators still navigating aftershocks from travel disruptions and cost inflation. However, while revenue growth is evident, its pace has noticeably slowed in recent months. This deceleration might explain why, despite the numbers, many hoteliers don’t feel the recovery—because although growth is occurring, it’s not as fast or as visible on the ground.

In many markets, particularly those with strong inbound tourism, demand is still translating into real performance gains. The bounce back isn’t limited to room revenue—Food & Beverage, spa, and ancillary spend are also contributing more meaningfully to the top line.

Figure 2

Profitability across APAC has narrowed to a tight race—especially between Oceania and South Asia—reflecting strong cost management and improved margins. Oceania’s higher cost base is evident as its lead in revenue doesn’t fully translate into GOPPAR dominance. Still, the region holds a healthy 34% GOP margin, edging above last year’s performance thanks to a strong Q1.

But perhaps the more telling trend lies beneath the surface. Gross Operating Profit per Available Room (GOPPAR) has grown in tandem with revenues, suggesting operators are regaining financial footing. However, the data also shows marked variance between markets. Some countries—especially leisure-heavy destinations—are exceeding pre-pandemic profitability, while others are still fighting to close the gap.

Figure 3

Q1 delivered a strong start for several Pacific cities—Perth, Melbourne, and Sydney all saw solid year-on-year gains in both revenue and profit, reflecting a healthy mix of demand and margin recovery. In contrast, some key Asian hubs like Hong Kong and Singapore continued to lag, with softer growth and lingering pressure on GOPPAR.
The divergence highlights how recovery trajectories remain uneven across the region, shaped by differing market dependencies and travel patterns.

In the first quarter of 2025, these variances became more pronounced. Markets like Thailand, Vietnam, and parts of Indonesia showed strong year-on-year GOPPAR growth, driven by a mix of higher occupancy and improved Average Daily Rate (ADR). Urban centres like Hong Kong and Seoul, on the other hand, while improving, are still recovering more gradually—constrained by corporate and group travel segments that remain sluggish.

Yet not all of the profit recovery can be attributed to stronger demand. The region has also seen a downward shift in total operating expenses per available room, including labour, over the past year. On paper, this looks like efficient management. In some cases, it is. Hotels that embraced tech-driven check-ins, lean staffing models, or back-of-house automation have preserved margins without sacrificing service quality.

But there’s a cautionary undercurrent here. Not every drop in cost leads to healthy performance. In certain markets, reduced staffing and deferred maintenance have led to guest satisfaction concerns or lower return visits. While it may boost short-term profits, it risks longer-term brand equity and pricing power. In a margin-focused environment, the question isn’t just “how much are we spending?” but “what are we spending it on?”

The story is clearest when we look at GOP margins. The 12-month rolling data shows some countries holding margins above 40%, even as revenues plateau—an indication that disciplined operations are paying off. But it’s also a sign that future gains may not come from cost control alone. With inflation still shaping labor and utility costs across the region, the next phase of performance growth will need to be strategic, not opportunistic.

For hoteliers and investors alike, the implication is clear: now is the time to rebalance. Revenues are stabilizing. Margin management is critical. But so too is investing in the guest experience, digital transformation, and data-driven forecasting.

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Based on a presentation by Bouserrind Comson