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Leaders look to Asia as global indicator
HONG KONG—As final preparations for this week’s Hotel Investment Conference Asia Pacific are wrapping up, several industry leaders serving as general-session speakers reflected on what went right in 2010—and what it will take to maintain momentum during 2011.

Raymond Bickson, managing director and CEO of Taj Hotels, Resorts & Palaces, marveled at the economic recovery in Asia—as well as other key topics.

“I’m surprised at the elasticity of the global market swings in 2010, but it has been remarkable in Asia in that the ‘tiger’ and ‘elephant’ have managed to make considerable and hit very positive (gross domestic product) growth benchmarks despite a slower bounce back in North America and Europe,” he said.

Despite that slower recovery elsewhere, Bickson is surprised to see hotel occupancy growth across the globe.

“Although hotel occupancy is nearing closer and closer to 2008 levels again, the global (average daily rate) and (revenue per available room) story will probably not be trading and firing on all cylinders until fall 2012—with the exception of India and China perhaps, which seem to buck the global market trends.”

Bickson said he also is surprised by the number of luxury and upper-upscale hotel assets available in the global marketplace.

“Cash still rules and is king,” Bickson said. “Previous global icons and trophy properties that are available have continued to still remain untouched, because the aggressive sovereign funds of the past decade have been more reactive than proactive compared to their track record in the past years, with the exception of one or two major players who still seem to be acquiring everything else.”

In addition, Bickson pointed to the re-emergence of mixed-use projects, though he predicted they would move ahead at a slow pace.

"I'm surprised at the availability of mixed-use, strata-realty projects that were previously announced within the past three years reappearing on the market being offered by the same developers to other hotel operators with renegotiated guarantees attached, but without any takers,” he said. “That strata-realty market and working model is still stressed for the foreseeable future, say the next two years. Hoteliers are still very asset-light oriented.”

Arthur de Haast, global CEO for Jones Lang LaSalle Hotels, appreciates the rebound that has occurred in some areas of the world—most notably Asia/Pacific.

“The speed and depth of the recovery in demand in core Asia/Pacific markets has led to robust (RevPAR) growth,” he said. “This, in turn, has led to strong investor interest in quality assets and encouraged development to restart in several cities. We expect this momentum to be maintained in 2011, even if the pace of economic growth in China abates somewhat due to weaker exports.”