Exclusive: Choice Hotels chief investment officer expects new developments to remain ‘muted’

The outlook for Australasia hotels for 2022-2023 is positive as the return of travel brings confidence and continued investment to the market. Choice Hotels Asia-Pac Director of Investments and Portfolio Growth, Cameron Burke, discusses development opportunities in the current climate and the company’s recent expansion into Thailand.

Renewed optimism abounds with the reopening of international borders and the cessation of prohibitive travel restrictions leading to a resumption of cross-border tourism – and with this, the green shoots of developmental (and transactional) activity are beginning to emerge.

Choice Hotels has had a particularly strong period in terms of development, recording more hotel signings in Australia than any other hotel group in 2021. With a particular focus on conversions, the scale of this development growth is supported by the strength of our portfolio coverage across regions – with the aggregate RevPAR of our CompSet-indexed hotels +51% in Australia and New Zealand in Q1 2022. We believe this portfolio performance will be sustained, the domestic middle market should continue to benefit from the confluence of pressures and a residual apprehension towards international travel.

We expect new developments in the region to remain subdued as yields begin to compress and the lack of retail lenders in the debt market continues, although other sources of capital increasingly become available. Mixed-use developments are expected to remain popular with developers in Tier 1 markets, while the hybrid management-franchise solution continues to gain favor with hotel owners looking for greater flexibility over their assets.

Additionally, we remain focused on growing the portfolio in key Asia-Pacific offshore markets to expand our international footprint and elevate our value proposition to loyal Choice Privileges members. We were delighted to recently welcome our first property to Thailand, Quality Resort and Spa Patong Beach in Phuket, setting the standard for new upscale hotels in the area – and we look forward to making a number of announcements. strategies in the coming months. .

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