Jones Lang unveils new Southeast Asia digest

Jones Lang LaSalle Hotels has identified Malaysia and Vietnam as the key growth markets in Southeast Asia in its latest Asia Digest 2008. The report also sees Singapore, Thailand and Malaysia continuing to be strong markets for predominantly intra-regional travel, and expects the Indian sub-continent to continue its growth trend.“In Southeast Asia, the limited number of investment opportunities that exist will mean firm prices and continued demand for assets,” said Scott Hetherington, Managing Director Asia, Jones Lang LaSalle Hotels.

“Singapore expects to deliver on its 2015 goal of 17 million arrivals and Sin$30 billion in tourism receipts, supported by its increasing MICE capacity and compelling new developments such as: the two Integrated Resorts, the Marina Bay Financial Centre, 2008 Formula 1 and Youth Olympics 2010.”
Key source markets for Singapore included Indonesia, China and Australia with 1.9 million, 1.1 million and 0.77 million arrivals in 2007, respectively. India led the growth in Singapore visitor arrivals in 2007 with a 13.7% increase to 0.75 million arrivals. This was followed by Australia with an 11.1% increase to 0.77 million and the Philippines with an 8.5 % increase to 0.42 million.

While domestic tourism is expanding in India owing to an increasingly affluent and growing population, increasing consumption and the introduction of low cost airline carriers, the Indian government is looking to grow foreign visitation. Over the last five years, India has seen double-digit growth in foreign visitors, the large majority of which (95%) are leisure travellers.

Business and leisure travel are the primary drivers of India’s tourism market. Stifled stock growth over the last five years, however, is leading to a demand supply crunch. And, while India’s RevPAR is growing rapidly, Jones Lang LaSalle Hotels cautions that this may slow in coming years due to supply additions in major Indian cities. During FY2006-2007, performance in Delhi/NCR and Mumbai grew 40% and Bangalore grew 20%, although Jones Lang LaSalle Hotels warns that such growth, especially in Delhi and Mumbai, is not sustainable for the long term.

Jones Lang LaSalle Hotels research indicates that room stock in Asia is set to grow 25.8% with 140,000 new rooms around the region.

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“We note that sports tourism is growing in popularity in Asia, which will account for increased tourism numbers,” said Mr Hetherington, citing upcoming major sporting events such as the Olympic Games in Beijing, the 2009 East Asian Games in Hong Kong, the 2010 Commonwealth Games in Delhi, and the 2010 Youth Olympic Games in Singapore.

In its Asia Digest 2008, Jones Lang LaSalle Hotels predicts that hotel transaction activity for Asia Pacific in 2008 will soften from 2007 (US$13.9 billion) back down to levels seen in 2005-2006. Key markets for transaction activity will be Singapore, Thailand and Japan, with some transactions in China and India.

Foreign direct investment (FDI) into the region is forecast to increase from US$230 billion in 2007 to almost US$250 billion over the next few years, mostly into hotels as well as transport and tourism infrastructure. Leading growth markets like China (PRC), Hong Kong, Singapore and India are forecast to account for almost 80% of the funds invested in 2008.
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