Combined hotel and food costs rose in 18 of the 22
Asia/Pacific cities in the Corporate Travel Index, while they decreased in
Bangkok; Jakarta, Indonesia; and Tianjin, China. Tokyo once again topped the
list of non-U.S. cities with the highest per diem. This year’s issue tracks a
night’s stay in an upscale hotel room, three meals and the cost of a taxi from
the airport to the city center. That added up to $579.63 for Tokyo, which tied
Auckland, New Zealand, for the largest year-over-year hotel rate increase among Asia/Pac
cities on the CTI, at 4.7 percent.
China
China’s 2017 year-over-year GDP growth of 6.9 percent
surpassed analysts’ expectations, but the country’s economy has yet to climb
back to the peak it reached in 2010, when GDP spiked 12 percent. In the
Asia/Pacific region, China’s slowdown has offset India’s strong economy, according to BCD travel
research consultancy Advito’s 2018 Industry Forecast, but individual markets
are the key.
The average daily rate for an upscale hotel decreased in
four of the five Chinese cities on the CTI. Shanghai dropped 6.2 percent,
Shenzhen 4.8 percent, Tianjin 2.6 percent and Guangzhou 2.5 percent. In
Beijing, however, ADR increased 2.8 percent. “Five-star properties in very good
locations or with excellent local reputations continue to command high prices,”
according to Advito. Hotel companies continued to open properties throughout
2017, outpacing demand, the consultancy noted. “Demand will catch up with
supply in the next few years, but for now, rate increases have slowed a little
in China.”
Food costs rose throughout China, in some cases
dramatically. Three meals in Guangzhou cost 32.4 percent more in 2017 than in 2016, while the cost increased 23 percent in Shanghai, 16.7 percent in
Shenzhen and 4 percent in Beijing. Hong Kong also increased 5 percent. Tianjin
was the only Chinese city on the CTI in which food costs dropped, in this case
by 7.2 percent.
Advito expects hotel rates in China to increase by between 2 percent and 4 percent in 2018. “There is still enough new demand from both
business and leisure travelers to keep rates moving upwards,” according to
Advito’s report. Likewise, Carlson Wagonlit Travel Asia/Pacific director
Richard Johnson expects China and India to have the largest ADR growth in 2018.
ADR in Hong Kong, meanwhile, decreased a modest 0.3 percent
from 2016 to 2017, according to the CTI. Advito attributed the relatively flat
ADR to weak demand.
India
“India’s economy remains the healthiest of the major
emerging Asia/Pacific markets with robust growth anticipated given pro-market
economic reforms,” according to CWT’s Global Travel Forecast for 2018. While
the country offers plenty of lower-priced properties, there are fewer high-end,
branded hotels, which business travelers prefer, according to Advito. The
country’s “critical shortage” of hotel rooms—supply was only two-thirds of
demand—drove hotel rates up in 2017, Advito noted. Bangalore, meanwhile, had a
“massive increase in new hotels,” which Advito said relieved rate pressure.
According to the CTI, Bangalore ADR increased only 2.5
percent from 2016 to 2017, while hotel prices were stagnant in Mumbai,
declining a minimal 0.2 percent and in New Delhi, where they dipped 0.3 percent.
As in China, meals contributed significantly to India’s
business travel costs, rising 18.6 percent in Mumbai, 10.8 percent in Bangalore
and 7.2 percent in New Delhi.
Australia & New Zealand
Costs rose across Australia and New Zealand, led by Sydney,
where combined food and hotel costs rose 7.2 percent. Hotel rates in Sydney
rose 4.3 percent year over year, according to the CTI, lining up with the view
of CWT’s Johnson, who said, “We’ve heard of Sydney as an incredibly
capacity-strained city in the past year.”
Melbourne combined food and hotel costs rose 5.7 percent
from 2016 to 2017 and 2.1 percent in New Zealand’s capital city of Auckland.
Johnson said tourism is driving Auckland’s hotel rate. A 4.1 percent decrease
in food costs mitigated business travel costs in Auckland, while food costs
surged in Australia, by 18.7 percent in Melbourne and 13.6 percent in Sydney.
Other Markets to Note
For Osaka-Kobe, combined hotel and food costs increased by
5.3 percent from 2016 to 2017. A 9 percent increase in food costs helped, while
a 3.6 percent increase in ADR also contributed. “Osaka is surprising, as they
have increased rooms in anticipation of the 2020 Olympics but demand isn’t
expected to kick in until next year,” Johnson said.
Combined hotel and food costs in Jakarta dropped
dramatically from 2016 to 2017, by 13.6 percent, thanks to a 9.3 percent drop
in ADR and a 21.9 percent decrease in food costs. Indonesia, however, is
sensitive to oil demand and pricing trends, Johnson said, and he expects ADR to
rise as oil prices recover in 2018.
Singapore’s ADR dropped 6.1 percent, according to
the CTI. “Singapore [hotel] demand hasn’t grown at the same pace as capacity,”
Johnson said. “Although [it’s] a high-occupancy market, supply levels are also
high, keeping prices soft."