Choice Hotels' recently-opened Quality Resort and Spa Patong Beach in Phuket

The Australasian hotel outlook for 2022-2023 is positive as the return of travel brings confidence and continued market investment. 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.

A renewed sense of optimism is abound with the reopening of international borders and cessation of prohibitive travel restrictions leading to a resumption of cross-border tourism – and with this, the green shoots of development (and transactional) activity are beginning to emerge.

Choice Hotels has enjoyed 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 extent of this development growth is underpinned by the strength of our portfolio coverage in the regions – with our hotels’ aggregated RevPAR indexed to CompSet +51% across Australia and New Zealand in Q1 2022. We’re confident that this portfolio performance will be sustained, with the domestic midmarket expected to remain a beneficiary of the confluence of macroeconomic pressures and a residual trepidation towards international travel.    

We anticipate that new development in the region will remain muted as yields begin to compress and the absence of retail lenders from the debt market continues, although alternative sources of capital are becoming increasingly available. Mixed-use developments should remain popular with developers in Tier 1 markets, while the hybrid management-franchise solution continues to gain favour with hotel owners seeking greater flexibility over their assets.  

We otherwise remain focused on portfolio growth in key offshore markets throughout Asia-Pacific, to expand our international footprint and elevate our value proposition for Choice Privileges’ loyalty members. We were excited to recently welcome our first property in Thailand, the Quality Resort and Spa Patong Beach in Phuket, setting the standard for new upper-midscale hotels in the region – and are looking forward to making a number of strategic announcements in the coming months.