SEA: A report by C9 Hotelworks reveals how the supply and pipeline of soft brand conversions is increasing across Southeast Asia.
According to STR data, there’s a total of 8,757 operating international standard hotels in Southeast Asia with over 80 per cent of these being independent. C9 Hotelworks notes the top three countries with the largest volume of independent hotels as Vietnam, Indonesia and the Philippines.
The 20 per cent of hotels that are affiliated with international hotel brands are said to present a significant opportunity for conversions, with chains such as Accor, Onyx and Marriott having the largest supply and pipeline for soft brand hotels across Southeast Asia.
Thailand, Indonesia and Vietnam are revealed as the top three regions for soft brand growth, tallying the most properties in the pipeline as well as keys. Overall, the upper upscale tier represents the largest proportion of soft brand offerings in the pipeline at 54 per cent.
Bill Barnett, managing director at C9 Hotelworks, commented: “Rising pressure from lenders and a mounting storm of unpredictability has set hotel owners adrift in a sea of economic uncertainty. This is especially prevalent in the midscale and upscale tiers, as most markets are domestic reliant and seeing cheap deals at the top end of the market creates a domino effect across tiers. Bottom line, there simply is not enough broad demand to sustain Southeast Asia’s hotel sector and the squeeze is felt directly where the largest room supply sits – in the middle.”
“Southeast Asia’s hotel industry is being driven into a new cycle by the necessity generated by the pandemic,” he continued, “as well as common practices in North America and Europe that are now accelerating into the region. Our research shows fast development in franchising, third party operators, and a pivot by international chains to management-light approaches. Given the significant size of independent hotels, it’s a logical step to fish where the fish are.”
David Johnson, CEO of Delivering Asia Communications, added: “Distribution and brand are on the cusp of a new disruptive cycle. While it’s a total departure from the standardised mass-market approach in recent times, it is without a doubt the shape of things to come.”
Click here to download C9 Hotelworks report Soft Brand Hotels – Southeast Asia Market Review.