Despite ongoing challenges relating to staffing and aircraft shortages, Asia Pacific has seen significant growth in airline demand in 2024, with the International Air Transport Association (IATA) estimating in June 2024 that total passenger numbers would grow by 17.4% y-o-y in 2024, and by 12.1% in 2025. Asia Pacific is now the largest demand base for airlines globally, accounting for approximately 34% of all travellers this year. By 2043, IATA estimate that the region’s share will increase to over 46%.
Mid-year review
While most airlines in Asia Pacific have registered an increase in passenger load factor compared to 2019 levels, airline capacity is still yet to see a full recovery due to a lack of staff and aircraft. However, CBRE forecasts that total international tourism arrivals should reach 2019 levels by the end of 2024.
Forecast made in January 2024
Recovery in airline capacity to remain slow
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Mainland Chinese tourists are demonstrating a much greater level of outbound activity in 2024, with travellers from this market returning in greater numbers to markets such as Japan, Korea and Southeast Asia. Visa-free entry and weaker currencies are playing a pivotal role in the return of the mainland Chinese demographic.
Bloomberg Intelligence expects international outbound air travel from mainland China to reach ~90% of 2019 levels by the end of the year, with a full recovery to pre-pandemic levels forecasted to be achieved by the end of 2025.
Mid-year review
Mainland Chinese tourists have been hesitant to travel abroad in the first 12 months following the border reopening. Whilst a pickup in outbound tourism is expected as economic headwinds subside, a full return of mainland Chinese tourists to pre-pandemic levels may not occur until 2025.
Forecast made in January 2024
Gradual return of Mainland Chinese tourists
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Except for the Maldives, all markets in the region had witnessed y-o-y increases in RevPAR performance as of June 2024 y-t-d. With ADRs remaining mostly stable across the region, this has been driven by a 80bps increase in average occupancy levels so far in 2024. However, there is still room for growth, with average occupancy levels still ~370bps below the average set in 2019.
Mid-year review
Expectations are that whilst ADRs should generally normalise in most markets, occupancy growth in well-managed assets should drive revenue growth. Operators that demonstrate flexibility and capitalise on the upswing in tourism will be the main beneficiaries, particularly those in North Asian markets such as Japan and Korea.
Forecast made in January 2024
RevPAR to be driven by occupancy recovery
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