The Asian hotel boom has been trending in the last few years on the back of strong tourist flows arising from burgeoning middle class economies and greater connectivity across the region. Arguably, the initial over-enthusiasm that is riding on the promise of tourism growth has led to a skewed distribution of hotels and new construction in certain markets. The hotel sectors in most of China, Singapore, certain cities in Australia, and Kuala Lumpur, are some of the markets where trading performances of the hotel segment have been in part weighed down by the new wave of hotel rooms. The fact is, demand fundamentals have not really deteriorated, and have instead improved in recent years, but supply has unswervingly run ahead of demand in general, and this is posing the greatest challenge to the Asian hotel sector in the near term.
Source : UBS AG