Advertisement
The View | China reopening: Asian tourism and retail set to reap benefits despite inflation fears
- China’s rapid reopening is expected to provide a major fillip to Asia’s pandemic-battered retail sector and hotel industry
- The ability of Asia’s hospitality industry to handle the return of Chinese tourists is a concern, but a welcome one given how unlikely reopening once seemed
Reading Time:3 minutes
Why you can trust SCMP
For a sign of how sentiment in Asia’s commercial real estate industry has shifted since China abruptly scrapped its zero-Covid policy at the end of last year, look no further than the share price of Dusit International, one of Thailand’s leading hospitality groups.
Advertisement
Since the end of November, the stock has surged by nearly 21 per cent, significantly outperforming the S&P Asia Pacific Reit Index, a gauge of listed real estate investment trusts in several countries in the region.
As of Monday, Chinese holidaymakers are allowed to travel overseas in tour groups again. Thailand expects to welcome 7 to 10 million Chinese tourists by air this year, close to 40 per cent of its target for international arrivals. Last year, Malaysian and Indian holidaymakers ranked first and second, respectively, among foreign arrivals yet together accounted for just 3 million visitors compared with the 11 million Chinese tourists in 2019.
The average hotel occupancy rate in Thailand in December rose sharply last year but was still below its level in early 2019, according to data from STR. In Vietnam, another market heavily reliant on Chinese outbound tourism, the occupancy rate was down on early 2019 levels.
China’s rapid reopening is expected to provide a major fillip to Asia’s pandemic-battered hotel industry. Even before Beijing abandoned its zero-Covid policy, Asian hotels were enjoying a brisk recovery as economies reopened, unleashing pent-up demand for leisure and corporate travel.
Advertisement
Last year, hotel transactions bucked the sharp decline in Asian commercial property investment volumes, rising 7 per cent year on year, according to JLL data. Nihat Ercan, head of investment sales Asia Pacific at JLL, said that following the crucial reopening of Japan’s economy last October, the end of China’s self-imposed isolation ensures that “the final piece of the recovery is in place”.
Advertisement