A Cathay Pacific Airways passenger plane flies
Credit: DH photo
Bengaluru: Indian outbound travel in Asia-Pacific (APAC) markets such as Thailand, Vietnam, and South Korea, is emerging as a key growth driver for the APAC hospitality sector, according to a report by professional services firm Colliers out on Friday.
Indian tourists are becoming a year-round source of demand in the sector, the report noted, helping sustain high room rates and marking a structural change in regional hospitality dynamics.
“India is driving a structural shift in APAC’s hospitality landscape, fueling resilient domestic growth while emerging as a powerful outbound force,” declared Nikhil Shah, Managing Director Hospitality and Alternatives at Colliers.
“With strong demand across the luxury, lifestyle and MICE (meetings, incentives, conferences, and exhibitions) segments, and rising investor confidence in experience-led assets, India is now central to regional tourism flows, sustaining premium pricing and reshaping travel dynamics. Despite limited liquidity in the investment market, robust valuations persist - not necessarily driven by cap rate-based transactions, but by long-term conviction in the sector’s future," Shah explained.
Hotel performance remained resilient in the January to March period (Q1) of 2025, with increasing revenue per available room (RevPAR), primarily driven by average daily room rates (ADR) growth. Yet, as rate-driven gains begin to plateau, the next phase of growth will hinge on driving occupancy, operational precision and guest experience.
Still, investment sentiment is recalibrating. APAC deal volumes fell 19% in Q1 2025, with yields rising to 5.4% in the first quarter of this year. Yet, capital continues to target high-liquidity markets such as Japan, South Korea and Australia, stated the report. Singapore too remains a wealth hub.
Phuket, Tokyo, New Delhi, Mumbai, and Osaka led the region in ADR rate growth in Q1 driven by strong domestic demand, a surge in international travel, and effective market positioning.
“The first quarter has traditionally been a slow period for transactions, and given geo-political uncertainty, it is not unexpected that many adopted a cautious, ‘wait-and-watch’ approach. However, as market conditions stabilise and the imperative to deploy capital intensifies, a pickup in activity is anticipated as the year progresses,” added Govinda Singh, Colliers’ Executive Director, APAC Capital Markets, Hotels and Hospitality and Advisory.