COVID-19 webinar summary: 5 key points on ASEAN, 16 April

March was a difficult month for many countries in the ASEAN region, with hotel occupancy falling below 20% for the likes of Thailand, Malaysia and Indonesia. However, the Philippines and Singapore ended the month with occupancy levels above 50%, and that’s where we pick up our five key points from 16 April’s webinar.

Drivers of the occupancy uptick in the Philippines

Several factors have enabled this uptick in occupancy and, as Jesper Palmqvist discusses in the webinar, essentially ‘bought time’ for the market. Firstly, there were variations in the introduction of lockdown measures—for example, Luzon on 16 March and Visayas 10 days later. Secondly, the government introduced a rule that hotels within two kilometres of key industries, including call centers and business process outsourcing (BPO), can operate with permission.

It is worth noting that there is a mixed picture for occupancy, with some hotels close to zero, and serviced apartments likely to be occupied. But the key question is how long this will continue and are further declines yet to come?

Singapore has also reported an occupancy increase

While Singapore finds itself in a soft lockdown situation, alongside further restrictions to business, travel and leisure, hotel occupancy has picked up in recent weeks. After declining to around 25% in March, a combination of stranded Malaysian workers, tourists facing issues with cancelled flights, and isolation/quarantined guests has driven occupancy above 50%.

Indonesia has suffered declines, although Jakarta has been more resilient

A staggered approach was introduced in Indonesia, with flights reduced in March and then limited to essential only in early April ahead of restrictions to movement on the 10th. It’s important to note that Indonesia is not under lockdown, and domestic flights are currently running, albeit at a limited capacity.

In terms of hotel performance, Jakarta is performing better than other resorts and leisure markets, where occupancy is frequently in single digits and close to zero. The capital, which has produced occupancy levels around 15-20%, is benefitting from serviced apartment and extended stay business. There was also a slight boost from Saudi flight guests who had to remain in the country for a longer period.

Despite overall declines in Malaysia, some markets are seeing rising occupancy levels

Like so many global markets, lockdown measures have driven hotel closures and performance declines in Malaysia. However, similar to the Philippines and Singapore, the picture in Malaysia is very much one of blended occupancy. There are currently more than 80 quarantine hotels, and the government is paying an amount to hoteliers when using their properties. While the graph below shows severe country-level declines, there are markets where occupancy is higher due to quarantined and stranded guests.

Thailand has also experienced notable occupancy declines

As the calendar turned to April, each week brought lockdowns and travel restrictions in key markets across Thailand—culminating in the closure of Phuket International Airport on 10 April. This has meant that there are currently stranded tourists and guests in Phuket, which account for a significant proportion of Thailand’s current occupancy.

Find the full recording of this webinar here and further insights into COVID-19's impact on hotel performance via our dedicated landing page.