Asia is experiencing a travel boom and sky-high hotel rates, fuelled mainly by China’s surprising reopening. After three long years, the country reopened its borders in January, in line with the first period of Lunar New Year travel.
China enforced one of the strictest Covid regimes in the world and, as a result, has suffered its slowest growth in nearly half a century. Now, the government is keen to get back on track, and Chinese travellers are eager to make up for lost time.
Asia’s Travel Boom
Countries across Asia have seen a striking influx of travellers in recent months, particularly those from China. The Lunar New Year saw Chinese tourists flock to nearby countries, with travel bookings increasing by 640% compared to the same period last year.
Restrictions aimed at travellers from China are limiting their access to a number of destinations across Europe, Australia, and Canada. As a result, Southeast Asia is seeing a huge uptick in demand led by Chinese visitors.
Joydeep Chakraborty, Chief Strategy Officer, Traveloka:
Rates have climbed more than 45% in destinations that are attracting the most Chinese travellers.
Hotel rates are soaring across Southeast Asia in top destinations such as Bali, Bangkok, Phuket and Singapore. Data from travel booking company, Traveloka, shows that rates in Bangkok have climbed the most, with a whopping 70% increase in prices. Ctrip, China’s leading travel booking website, saw a similar-sized rise in rates towards the end of January.
Group tours are also a popular mode of travel for Chinese travellers. In February, the country resumed group tours organised by travel agencies, with Thailand remaining the top destination. Tours were also allowed in 20 other countries such as Indonesia, Cambodia, Singapore, United Arab Emirates, Hungary, and more.
Traveloka’s data also shows that Chinese travellers are favouring high-end hotels, and this is driving high-end rates up even further. Interest in luxury hotels shown by Chinese travellers has almost doubled, rising from 18% to 34% over the past three years (Morgan Stanley).
A rise in demand for accommodation and rising hotel rates across Southeast Asia is not surprising given China’s recent reopening. Nevertheless, it is very much a positive development for investors.
China is a huge market (in terms of travel and tourism) for countries across Southeast Asia; namely, Thailand, Cambodia, Singapore and the like. With an influx of Chinese travellers already underway, these countries are receiving a much-welcomed boost to their local economies. Meanwhile, investors can look forward to increased demand for short-stay accommodation and, with this, hopefully stronger returns on their investments.
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