Asian hotels affected by crisis

Reuters |

HONG KONG - From the gambling mecca of Macao to China's bustling business capital Shanghai, Asia's tourism business has been booming. But risk consultant Robert Broadfoot says the hotel industry is already feeling the pinch from the global credit crisis.
"You are going to have a very sharp downturn in the tourists both coming in and regional so for the next 12 months it's going to be a period of real consolidation," said Broadfoot at a recent conference in Hong Kong on investment in the hospitality.
A slower economy means that plans for as many as 90,000 new hotel beds in Asia will be delayed as profits shrink down to single digit growth in some countries. Hotel room prices have been on a rise in Asia for the past year despite occupancy declines.
But good news for the consumer - there are bound to be bargains.
"There will absolutely be some pressure on rates as we go into the coming months but as you look at specific markets and increasingly we have to think both globally and we also have to think about each individual market.
And if you have a strong brand and if you are in a market where supply isn't as readily available you can still keep rate," said Starwood president and CEO Frits Van Paasschen.
Some countries in Asia are better positioned to weather the storm among them Hong Kong and Japan because experts say these countries can take advantage of the crisis to reposition themselves. But the key, they say, is for hotels to target regional customers instead of visitors from the West whose numbers are expected to dwindle.