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Business Standard
a day ago
- Business
- Business Standard
Indian outbound travel fuels hospitality sector in APAC locations: Colliers
India is rapidly emerging as a central force in the Asia Pacific hospitality sector, according to Colliers' latest report, Asia Pacific Hospitality Insights May 2025. The country is driving both resilient domestic growth and acting as a significant catalyst for outbound travel to key regional destinations. 'India is driving a structural shift in Asia Pacific's hospitality landscape, fuelling resilient domestic growth while emerging as a powerful outbound force,' said Nikhil Shah, managing director, Hospitality & Alternatives, Colliers India. He emphasised the strong demand across luxury, lifestyle and MICE segments, coupled with rising investor confidence in experience-led assets, making India central to regional tourism flows and sustaining premium pricing. While overall Asia Pacific hospitality investment volumes saw a 19 per cent dip in Q1 2025, India's unique position is reshaping the landscape and sustaining robust valuations. The report highlights that the steady momentum from 2024 has continued into 2025 for the Asia Pacific hospitality sector, shifting towards performance-led growth. But India stands out. A key development is the burgeoning Indian outbound travel market, which is increasingly fuelling the hospitality sector in destinations such as Thailand, Vietnam and South Korea. With growing disposable incomes and a strong appetite for experience-led travel, Indian tourists are becoming a dependable, year-round source of demand, contributing to strong room rates and marking a structural change in regional hospitality dynamics. Domestically, the outlook for the Indian hospitality sector remains robust, with Tier II cities poised to become significant contributors to future expansion. Spiritual tourism, in particular, is emerging as a crucial driver of inbound travel within India. Towns such as Ayodhya, Dwarka, Puri, Shirdi, Tirupati and Varanasi are set to unlock new investment avenues and fuel long-term growth, backed by focused government policy support and rapid infrastructure development. Despite limited liquidity in the broader investment market, robust valuations persist in India, driven by long-term conviction in the sector's future rather than solely cap rate-based transactions. Across the Asia Pacific, hotel performance remained resilient in Q1 2025, supporting ongoing deal activities. Revenue per Available Room (RevPAR) across the region saw a 2.1 per cent year-on-year increase — a significant improvement from the modest 0.4 per cent growth between 2023 and 2024 — primarily driven by Average Daily Room Rate (ADR) growth and higher occupancy rates. New Delhi and Mumbai were among the top performers in the region for ADR growth, alongside Phuket, Tokyo and Osaka, reflecting strong domestic demand, international travel surges and effective market positioning. Govinda Singh, Colliers' executive director, APAC Capital Markets, Hotels & Hospitality and Advisory, acknowledged the traditionally slow first quarter for transactions and the cautious 'wait-and-watch' approach due to geopolitical uncertainty. However, he anticipated a pickup in activity as the year progresses, with investors shifting towards value-add strategies focused on cash flow and income growth.
Business Times
5 days ago
- Business
- Business Times
Batam, Johor, Da Nang: Asean's new growth cities
[HO CHI MINH CITY] Infrastructure development and breakthrough incentives within special economic and trade zones are drawing global businesses, investors and talent beyond Asean's traditional metropolises to emerging 'second cities' such as Johor Bahru, Da Nang and Batam. While smaller and less globally known than capital cities or primary metropolises like Kuala Lumpur, Jakarta, or Ho Chi Minh City, these rising hubs are capturing attention for their investment potential, quality of life and innovation ecosystems. 'These shifts reflect a broader trend of decentralisation, synergistic and regional growth within Asean,' said Govinda Singh, executive director at Canada-based investment management company Colliers International. He added: 'What sets successful rising cities apart is their ability to enable ease of doing business, investment in infrastructure and long-term policy stability.' Why 'second cities' are taking off In today's competitive environment, he noted that investors seek clear value propositions, such as cost advantages, special economic zones, talent pipelines and logistics connectivity. 'Ultimately, it's not just about being cheaper than the capital cities; it's about leveraging comparative strengths, being smarter, more specialised and investment-friendly,' he added. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Sam Cheong, head of group foreign direct investment advisory at UOB, observed that traditional economic hubs like Singapore, Jakarta or Ho Chi Minh City are increasingly facing resource constraints to accommodate the needs of foreign direct investment effectively. This has given rise to the emergence of new hubs, especially those near established ones. The Business Times takes a closer look at these emerging cities that have been in the spotlight in recent years. Johor Bahru: Riding Singapore's ripple Johor Bahru's strategic southern location, less than 30 km from Singapore, positions it uniquely. The Johor-Singapore Causeway, a vital link handling over 300,000 daily crossings, is one of the busiest border checkpoints in the world. In January 2025, Malaysia and Singapore officially launched the Johor-Singapore Special Economic Zone (JS-SEZ), a cross-border initiative by both nations to harness the power of their proximity. Siva Shanker, chief executive officer of the estate agency at Rahim & Co International, said: 'With ongoing infrastructure projects and various incentives in place, the JS-SEZ presents compelling opportunities for business owners considering relocation or expansion in this region.' Amid the ongoing global trade headwinds, Dr Wong Chin Yoong, an economics professor at Universiti Tunku Abdul Rahman Malaysia, said that the potential of cities like Johor Bahru could drive greater intra-Asean collaboration, as the region requires a development strategy that buffers it from geo-economic risks. 'This necessitates greater intra-Asean interdependence through cooperative initiatives that minimise exposure to super power competition, enhance regional resource sharing, and cultivate Asean as a significant regional power in both production and consumption,' he said. The demand for Johor Bahru real estate is rising on the back of the progress made in the building of the railway shuttle linking Singapore and Johor Bahru and the establishment of the JS-SEZ. PHOTO: BT FILE Batam: Indonesia's fast-charging digital hub In Indonesia, Batam, located about 20 km south of Singapore, is also fast rising as a key hotspot for investments for data-centre operators, power developers and semiconductor manufacturers, giving Johor a run for its money as the top destination for companies expanding beyond the city-state. The growth is especially bolstered by Batam's Special Economic Zone perks and direct subsea cable links that tether it seamlessly to Singapore's digital backbone. For example, the Nongsa Digital Park, located on Batam's north-eastern tip and designed to support the digital economy, is a few kilometers away from the landing of 13 submarine cables that link it directly with various parts of Indonesia, Singapore, Malaysia and the US West Coast. The city's biggest win so far was Apple's landmark US$1 billion commitment to produce AirTags on the island, marking a major milestone in Batam's evolution into a regional tech and data hub. Nongsa Digital Park is a designated Special Economic Zone in Indonesia focusing on digital technology and tourism activities. PHOTO: NONGSA DIGITAL PARK Da Nang: From Vietnam's holiday haven to investment hotspot Da Nang, one of Vietnam's most popular tourist destinations, is now showcasing a new identity – that of an investment hub. The city is strategically located in central Vietnam, between the country's two major economic centres in the north and the south, Hanoi and Ho Chi Minh City, respectively. It is home to two deep-water ports, Tien Sa Port and the developing Lien Chieu Port, which are vital gateways in the eastern extremity of the East-West Economic Corridor, connecting Vietnam, Laos, Thailand and Myanmar across the Greater Mekong Sub-region. 'Naturally, the combination of the holiday lifestyle and the business lifestyle will be a magnet for a lot of people,' said Andy Khoo, managing director at Terne Holdings, a Singapore-based investment group. Starting January 2025, Da Nang became the first city in Vietnam officially approved to pilot a Free Trade Zone. Plans are afoot to develop it across 10 dispersed locations connected to Lien Chieu seaport and Da Nang International Airport. Another key driver is its designation as one of the two locations for Vietnam's international financial hub, along with Ho Chi Minh City, with 'unprecedented' financial mechanisms being developed and the authorities actively working to attract multibillion-dollar investments. Da Nang has allocated six land parcels for the development of the city's international financial hub, including the 9.7-hectare site overlooking the estuary of the Han River. Richard McClellan, founder and principal at Ho Chi Minh City-based RMAC Advisory, said: 'With a smaller scale than Ho Chi Minh City, Da Nang offers an ideal environment to experiment with new initiatives within a controlled and managed space.' Da Nang has allocated six land parcels for the development of the city's international financial hub, including the 9.7-hectare site overlooking the estuary of Da Nang's iconic Han River (above). PHOTO: JAMILLE TRAN, BT Ayutthaya: Thailand's 'Silicon Valley' Ayutthaya is an emerging city in Thailand's central-west economic corridor, where some 40 per cent of approved foreign investment projects in the first quarter of the year are located, said UOB's Cheong. The other up-and-coming city is Samutprakarn, which is in the Bangkok Metropolitan Region. These cities are part of the evolution of Thailand – traditionally known for its tourism industry – into an industrial powerhouse, particularly through its economic corridor initiatives. The strong infrastructure connectivity to ports and airports offers a geographical advantage for several of its rising hubs. 'These cities are within an hour's drive from Bangkok and are tipped to be the 'Silicon Valley' of Thailand,' he said. 'The availability of a higher-skilled labour force can be found in these cities, and strong policy support for these prioritised sectors is drawing more high-value investment.' Ayutthaya, 70 km north of Bangkok, was once the historic capital of a kingdom and is now a tourism hotspot. The city is also a key stop on the Thai-Sino high-speed rail system currently under construction. When completed, the high-speed rail will connect Bangkok to Nakhon Ratchasima, and ultimately to China via Laos, further strengthening its position as a potential logistics hub. Ayutthaya Historical Park in Ayutthaya. Ayutthaya is where one of the six stations on the Bangkok-Nong Khai high-speed rail project is to be located. The project is part of the broader Pan-Asian Railway Network. PHOTO: PIXABAY Additional reporting by Tan Ai Leng in Kuala Lumpur, Elisa Valenta in Jakarta, and Goh Ruoxue in Singapore
