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COVID-19 Impact on Hotels in Asia Pacific

APRIL 2020

Peggy Lee Analyst

Chariss Kok Xin Manager

Chee Hok Yean Regional President Asia Pacific Overview FR The momentum in visitor arrivals has been lost due to the impact of the COVID-19 pandemic. January 2020 kick off with robust visitor arrivals before registering an average decrease of approximately 35% and 65% across the region (Australia, Indonesia, Japan, Malaysia, Maldives, Myanmar, New Zealand, Philippines, Singapore and Vietnam) in February and March, respectively. Similarly, the COVID-19 outbreak had cast a shadow over the hotel performance in Asia Pacific. Hotel occupancy decreased by an average of 9% and 27% in February and March, respectively. Average Daily Rate (ADR) decreased by an average of 7% and 10%, translating to an average decrease of 19% and 55% in February and March for Revenue Per Available Room (RevPAR), respectively. In March, all the ten countries experienced a decline in occupancy rate, ADR and RevPAR within the range of approximately 20% to 35%, 6% to 17%, and 40% to 60%, respectively. Some of the common measures to stem the spread of COVID-19 includes barring foreign visitors, 14-days quarantine, avoiding non- essential travel plans, enforcing social distancing, working from home, banning mass gatherings and events, and temporary closure of attractions, community facilities, entertainment venues, schools and places of worship. To assist frontline health workers, affected businesses and employees, governments announced stimulus packages and various incentives such as providing credit facility, handing out cash grants, lowering of interest rates, wage subsidies, offering tax breaks, and supporting SMEs and hard-hit sectors. While the pandemic is anticipated to prolong, hotels should start to draw up plans in preparation for a recovery. In the meanwhile, it is the perfect time to relook into operational strategies, cost-saving initiatives, refurbishment, marketing distribution channels, staff training and technology upgrade. 2 Source: Unsplash Global Measures FR Globally, many countries have allocated or pledged record amount of economic relief package to cushion the impact caused by COVID-19. The following highlights some of the key initiatives: China's central bank has cut the rate on reverse repurchase agreements by 20 basis points, the largest in nearly five years to relieve the economic pressure. The People's Bank of China had also injected RMB50 billion yuan into the money markets. Other forms of economic relief include relaxing penalties on bad debts, cutting interest rates, reducing taxes, allowing borrowers to skip interest payments for as long as six months, and pledging to adopt more "proactive" fiscal policies. South Korea has pledged KRW96.7 trillion (USD80 billion) in economic stimulus, where KRW29.1 trillion will be granted as loans to small- and medium-sized companies, KRW20 trillion will be used to buy corporate bonds and commercial paper of companies facing a credit crunch, the Financial Services Commission announced a KRW10.7 trillion facility set up to stabilise stock markets. It will also commence a bond buying facility in April that will be funded by 84 institutions, including the Bank of Korea, commercial banks and insurers. The transport ministry, financial regulator and state-run Korea Development Bank has also announced that they would extend up to KRW300 billion of liquidity to domestic budget carriers to provide relief. Thailand has announced an THB411 billion (USD12.7 billion) stimulus package in the form of soft loans, a fund, and tax benefits for those affected by the outbreak. The soft loan will amount to THB150 billion. There will also be relaxed debt repayments and lower interest rates for businesses, while the central bank has also asked banks to help debtors, withholding taxes for businesses to be reduced. Support for utilities costs, and higher tax benefits from some long-term fund investments were also announced. The government will set up a THB20 billion fund to help firms or workers affected by the coronavirus outbreak. The United Kingdom has announced a stimulus package standing at £350 billion which include £330bn in state-backed loans for all businesses through the banking system with the help of the Bank of England, £20bn in other aid, a business rates holiday, and grants for retailers and pubs. Help for airlines is also being considered. Smaller businesses would be able to access cash grants of between £10,000 to £25,000 to see them through the crisis. The United States of America (USA) has approved three stimulus packages worth USD2.5 trillion, which comes in the form of loans, tax breaks and direct payments for major corporations and individual taxpayers. 3 Source: Unsplash Total Cases Number of Death Recovered Cases Australia 6,746 90 5,685FR *As of 30 April 2020 Australia began restricting China arrivals on 1 February, Iran arrivals on 1 March, South TOTAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019) Korean arrivals on 5 March and Italy arrivals on 11 March. Thereafter, the government International Visitor Arrivals Y-o-Y Growth Rate Average Daily Rate Revenue Per Available Room Occupancy Rate (%) started enforcing social distancing measures such as limiting the number of people per 25,000 9.0% 5Y CAGR: 5.1% 225 100% outdoor gathering, closing pubs and clubs, and limiting restaurants to take-away services 8.0% 200 95% 20,000 7.0% 175 90% only. On 18 March, Australian citizens are strongly encouraged to defer all travel plans 85% 6.0% 150 15,000 80% abroad. Shortly, on 20 March, all non-Australian citizens and residents are denied entry 5.0% 125 75% 4.0% 100 into Australia. On 23 March, Australia has declared a one-month lockdown. On 16 April,

10,000 (InAUD) 70%

Y GrowthY Rate(%) (inthousands) 3.0% - 75

o Australia has announced a four-week extension for the lockdown period. - TotalArrivalsVisitor 65% 2.0% Y 5,000 50 60% 1.0% 25 55% Change from Previous Month Change from Same Time Last Year 0 0.0% 0 50% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Feb 2020 Mar 2020 Feb 2020 Mar 2020 Visitor Arrivals - - - - SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2019) Occupancy Rate 1.5 p.p. -26.2 p.p. -5.2 p.p. -30.5 p.p. 2014 2015 2016 2017 2018 2019 2020

8,000 15.2% China ADR -5.4% -6.3% -4.5% -8.5% 7,500 New Zealand RevPAR -3.3% -40.7% -10.9% -45.0% 7,000

15.1% U.S.A 6,500 48.2%

6,000 U.K. Key Government Initiatives and Measures (inthousands)

TotalArrivalsVisitor 5,500 8.6% Japan • AUD80 Billion Loan Relief Package: Up to AUD80 billion is allocated to offer business 5,000 Others loan relief, this includes deferring loan repayments for small businesses for six months 4,500 7.6% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5.3% at a cost of AUD8 billion. Other stimulus includes quantitative easing and a three-year funding facility for at least AUD90 billion to the country's banks at a fixed rate of TOTAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) 0.25%.

8,000 Average Daily Rate Revenue Per Available Room Occupancy Rate 250 100% • AUD130 Billion Job Keeper Payment: AUD130 billion is allocated to provide 7,000

6,000 200 80% replacement wages to up to six million people who may lose their jobs otherwise due

5,000 to the Covid-19 outbreak. The scheme will benefit almost half the workforce and will 150 60%

4,000 provide people with AUD1,500 per fortnight, or about 70% of the average wage. (InAUD)

(inthousands) 3,000 100 40% TotalArrivalsVisitor 2,000 • Cash Flow Support for SMEs and Non-Profit Organisations: Temporary cash flow 50 20% 1,000 support will be provided to small and medium businesses (SMEs) and non-profitable

0 0 0% 2018 Jan 2018 Feb 2018 Mar 2019 Jan 2019 Feb 2019 Mar 2020 Jan 2020 Feb 2020 Mar 2018 Jan 2018 Feb 2018 Mar 2019 Jan 2019 Feb 2019 Mar 2020 Jan 2020 Feb 2020 Mar organisations that employ staff during the economic downturn associated with *Feb and Mar 2020 data not available COVID-19. The government will provide tax-free cash flow boosts of between Source: Australia Government, Department of Infrastructure, Transport, Regional Development and Communication, HVS Research AUD20,000 and AUD100,000 to eligible businesses, delivered 4 through credits in the activity statement system. Total Cases Number of Death Recovered Cases Indonesia 10,118 792 1,522FR *As of 30 April 2020 Indonesia has implemented a travel ban on China, and bar visitors with recent travel INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019) history to China on 5 February. On 8 March, Indonesia has banned entry and transit of visitors with recent travel history to affected regions in Iran, Italy and South Korea. International Visitor Arrivals Y-o-Y Growth Rate Average Daily Rate Revenue Per Available Room Occupancy Rate (%) 18 40% 12,000 100% Subsequently on 20 March, Spain, France, Germany, and the United Kingdom were added 5Y CAGR: 11.3% 16 35% 95% 10,000 onto the list. In addition, Indonesia has declared a two-weeks state of emergency in 14 90% 30% 85% 12 8,000 Jakarta, Yogyakarta, West Java, East Java, Banten, West and East Kalimantan till 2 April. 25% 80% 10 20% 6,000 75% On 31 March, Indonesia announced temporary ban to all foreign visitors. On 10 April, 8

(inmillions) 15% 70% Y GrowthY Rate(%) Jakarta announced wide-scale social restrictions till 24 April, however, this has since been

6 - 4,000

o (InThousands/IDR)

- 65% 10% Y 4 60% extended till 22 May. From 24 April to 1 June, Indonesia has suspended all passenger 2,000 TotalArrivalsVisitor International 2 5% 55% flights. 0 0% 0 50% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Change from Previous Month Change from Same Time Last Year Feb 2020 Mar 2020 Feb 2020 Mar 2020 SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2019) Visitor Arrivals -30.4% - -28.9% - 2014 2015 2016 2017 2018 2019 2020 16.6% 1,800 Malaysia Occupancy Rate -2.8 p.p. -24.4 p.p. -3.1 p.p. -28.1 p.p.

1,600 China ADR -18.8% -9.8% -17.3% -17.3% 1,400

1,200 46.6% 11.6% Singapore RevPAR -22.6% -48.2% -21.5% -55.4% 1,000 800 Australia Key Government Initiatives and Measures

(inthousands) 600 10.9% • IDR22.92 Trillion Emergency Fiscal Stimulus Package: IDR22.92 trillion is allocated to

400 Timor Leste TotalInternationalArrivals 200 Others protect Indonesia’s economy which includes tax breaks. 0 7.8% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 6.6% • IDR298.5 Billion Tourism Budget: IDR298.5 billion is allocated to stabilise Indonesia’s economy and aid tourism businesses through the economic slowdown. This includes INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) IDR98.5 billion incentive for airlines and tour operators, aimed to encourage special 1,600 Average Daily Rate Revenue Per Available Room Occupancy Rate discounts for foreign tourists, IDR103 billion for tourism promotional activities, IDR25 1,200,000 100% 1,400 billion to improve tourist attractions, and IDR72 billion to be invested on influencers. 1,200 1,000,000 80%

1,000 800,000 • IDR860 Billion Aviation Relief Package: IDR860 billion is allocated to provide relief to 60% 800

600,000 the aviation sector. IDR443 billion will be granted to airlines, in the form of a 30% (inthousands) 600 (InIDR) 40% 400,000 discount for 25% of the total available seats per flight to 10 tourist destinations such

400 TotalInternationalArrivalsVisitor 20% as Yogyakarta, Manado, Bali, Mandalika, Labuan Bajo, Bangka Belitung, and Batam. 200 200,000

0 Other support measures include aviation fuel discounts and reduced aircraft 2018 Jan 2018 Feb 2018 Mar 2019 Jan 2019 Feb 2019 Mar 2020 Jan 2020 Feb 2020 Mar 0 0% 2018 Jan 2018 Feb 2018 Mar 2019 Jan 2019 Feb 2019 Mar 2020 Jan 2020 Feb 2020 Mar passenger services fees. *Mar 2020 data not available Source: Badan Pusat Statistik (BPS), Statistic Indonesia, HVS Research • IDR3.3 Trillion Tax Relief: IDR3.3 trillion is allocated to 33 district and city 5 governments in the ten tourist destinations in return for waiving hotel and restaurant taxes for the next six months. Total Cases Number of Death Recovered Cases Japan 14,165 437 3,187FR *As of 30 April 2020 Japan has announced its first confirmed COVID-19 case in on 16 January. On 1 February, INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019) Japan banned the entry of visitors from Hubei, China, and shortly on 4 February, the International Visitor Arrivals Y-o-Y Growth Rate Average Daily Rate Revenue Per Available Room Occupancy Rate (%) nation was plagued with the Diamond Princess Cruise outbreak. On 13 February, Japan 35 70% 180 100% 5Y CAGR: 18.4% 95% 30 60% 160 banned entry of visitors from Zhejiang, China. On 27 February, Japan banned visitors from

140 90% 25 50% Daegu City/Cheongdo County in North Gyeongsang Province. By 3 April, Japan has 85% 120 80% banned visitors from the United States, China, most of Europe, Australia, Britain, South 20 40% 100 75% 15 30% 80 Korea and many Southeast Asia countries. On 7 April, Japan declared state of emergency

(inmillions) 70%

oYGrowth Rate(%) -

(InHundreds/JPY) 60 10 20% Y 65% in Tokyo, Chiba, Kanagawa, Saitama in the Greater Tokyo region, and Osaka and Hyogo 40 TotalArrivalsVisitorInternational 60% 5 10% prefectures in the Kansai region and Fukuoka on Kyushu island. 20 55%

0 0% 0 50% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Measures to curb virus spread were implemented, including urging firms to allow employees to work from home and temporary closure of attractions across Japan, from SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2018) museums and galleries to theme parks and tourist attractions. 2014 2015 2016 2017 2018 2019 2020 3,500 Change from Previous Month Change from Same Time Last Year 23.0% 24.2% Korea 3,000 China Feb 2020 Mar 2020 Feb 2020 Mar 2020 2,500 Taiwan 2,000 3.6% Visitor Arrivals - - - - Hong Kong 1,500 7.1% Occupancy Rate -8.7 p.p. -32.2 p.p. -18.7 p.p. -52.1 p.p.

(inthousands) Thailand 1,000 26.9% 15.3% Others ADR -8.8% -16.7% -12.2% -30.1%

TotalArrivalsVisitorInternational 500

0 RevPAR -19.6% -58.2% -31.9% -73.1% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec *2019 full year data not available Key Government Initiatives and Measures INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) • JPY108 Trillion Stimulus Package: JPY108 trillion is allocated to provide economic relief to Japan. This includes JPY80 trillion to protect jobs and save small and medium- 1600 Average Daily Rate Revenue Per Available Room Occupancy Rate 16,000 100% sized businesses. Employment subsidies will be expanded to help firms pay salaries 1400 14,000 and interests, and avoid job cuts. Government-backed lending institutions will offer 1200 80% 12,000 1000 interest-free loans, and handouts of up to JPY2 million will be available for applicable 10,000 60% 800 small and medium-sized businesses. JPY2.5 trillion will be allocated to assist medical

8,000 (InJPY) (inthousands) 600 40% institutions and research and development efforts. Cash handouts of JPY300,000 will 6,000 400

TotalInternational Visitor Arrivals 4,000 also be available to low income families. Financial incentives worth an estimated 200 20% 2,000 JPY15.7 trillion will be set aside to attract manufacturing activities back to Japan. 0 2018 Jan 2018 Feb 2018 Mar 2019 Jan 2019 Feb 2019 Mar 2020 Jan 2020 Feb 2020 Mar 0 0% 2018 Jan 2018 Feb 2018 Mar 2019 Jan 2019 Feb 2019 Mar 2020 Jan 2020 Feb 2020 Mar Lastly, JPY8.5 trillion will be set aside to boost tourism, transport and the *Mar 2020 data not available restaurant and entertainment sectors after the coronavirus is contained. This Source: Japan National Tourism Organization (JNTO), HVS Research 6 includes marketing campaigns and offering of coupons and discounts. Total Cases Number of Death Recovered Cases Malaysia 6,002 102 4,171FR *As of 30 April 2020 On 7 February, Malaysia expanded a ban on visitors from China to include Zhejiang and INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019)

Average Daily Rate Revenue per Available Room Occupancy Jiangsu provinces in addition to Hubei province. On 16 March, the government International Visitor Arrivals Y-o-Y Growth Rate 400 0.8 implemented a movement control order to restrict movement nationwide. All Malaysians 28 8% 5Y CAGR: -1.0% 350 0.7 was barred from travelling abroad and there was also a ban on all foreign visitors. 28 6% 4% 300 0.6 27 2% 250 0.5 At the same time, an order was issued to ban mass gatherings, including religious, sports, 27 200 0.4 0% (InMYR) social and cultural events. All houses of worship, businesses, schools, universities are to 26

(inmillions) -2% 150 0.3

Y GrowthY Rate(%) close, except supermarkets, markets, mini markets and convenience stores. All

- o

26 - -4% Y 100 0.2 government and private premises will be closed except those in essential services. On 25 25 TotalArrivalsVisitorInternational -6% 50 0.1 March, the coronavirus lockdown was extended by two weeks to 28 April from the initial 25 -8% 0 0 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 cutoff point. Subsequently, on 23 April, the government announced to extend its one- month lockdown by another two weeks to 12 May. However, there have been early signs SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2019) of COVID-19 restrictions being eased in Malaysia. The government plans to monitor the 2014 2015 2016 2017 2018 2019 2020 situation for up to four weeks before proposing to reopen the social and educational 3.00 25.3% sectors. 2.75 Singapore 2.50 38.9% Indonesia Change from Previous Month Change from Previous Year 2.25 China 2.00 4.7% Thailand Feb 2020 Mar 2020 Feb 2020 Mar 2020 1.75 Brunei 7.2% 1.50 Others Visitor Arrivals - - - - 1.25 InternationalVisitor(inArrivalsmillions) Occupancy Rate -15.4 p.p. -24.2 p.p. -16.1 p.p. -42.1 p.p. 1.00 11.9% 11.9% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ADR -10.8% -10.1% -9.1% -11.8% RevPAR -33.0% -56.9% -32.5% -69.4% INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR)

3,000 Key Government Initiatives and Measures Average Daily Rate Revenue Per Available Room Occupancy Rate 400 80.0% 2,500 • RM230 Billion Economic Stimulus Package: This package is in addition to the RM20 350 70.0% 2,000 billion package announced on 27 February. RM128 billion will be allocated to improve 300 60.0%

250 the welfare of Malaysians through one-off cash payments to households and 1,500 50.0%

200 40.0% individuals. Other benefits include discounts on utility bills, deferments of rental (inthousands)

1,000 (InMYR) 150 30.0% payment for public housing, reduction of the minimum Employees Provident Fund’s

TotalInternational Visitor Arrivals 500 100 20.0% contribution. RM100 billion is allocated to support affected businesses through cash 50 10.0% 0 flow relief including exemption from contributions to the mandatory Human 2018 2018 2018 2019 2019 2019 2020 2020 2020 0 0.0% Jan Feb Mar Jan Feb Mar Jan Feb Mar 2018 2018 2018 2019 2019 2019 2020 2020 2020 Resources Development Fund for six months, wage subsidies for three months, *2020 data not available Jan Feb Mar Jan Feb Mar Jan Feb Mar increase existing funds in providing financial assistance to SMEs and loan Source: Tourism Malaysia, HVS Research 7 guarantees to larger firms for working capital financing. Bank Negara Malaysia will provide a special relief facility worth RM2 billion. Total Cases Number of Death Recovered Cases Maldives 278 1 17 FR *As of 30 April 2020 On 7 March, Maldives recorded the first positive COVID-19 cases on Kuredu Island Resort, INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019) and the patients were moved to an isolation center in Farukolhufushi island. On 8 March, 1.8 International Visitor Arrivals Y-o-Y Growth Rate 16.5% Average Daily Rate Revenue Per Available Room Occupancy Rate (%) two more cases were confirmed on Sandies Bathala Maldives. Maldives imposed an entry 1.6 800 100% 5Y CAGR: 7.2% and transit ban on visitors and crew with travel history to Italy. Shortly, on 9 March, two 95% 1.4 700 90% 1.2 11.0% 600 more cases were confirmed on Kuredu Island Resort. On 10 March, Maldives announced 85% 1.0 500 80% that passengers and crew with travel history to Bangladesh will not be allowed entry to 0.8

400 75%

(inmillions) Y GrowthY Rate(%)

- the country, until 24 March.

o (InUSD) 0.6 5.5% -

Y 70%

300 TotalArrivalsInternational 0.4 65% 200 60% The Maldives government has declared a state of public health emergency on 12 March 0.2 100 55% 0.0 0.0% after recording a total of eight confirmed COVID-19 cases. In the following days, the 2014 2015 2016 2017 2018 2019 0 50% 2014 2015 2016 2017 2018 2019 government took precautions including quarantining several resorts, closing public spaces, disinfecting public transport, postponing the re-opening of schools, halting tourist SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2019) excursions, and banning guesthouses from checking-in foreigners in Greater Male.

2014 2015 2016 2017 2018 2019 2020 16.7% 200 China On 21 March, the Maldives government had placed temporary travel bans on individuals 180 160 India arriving from COVID-19 affected countries including China, Iran, Italy, Bangladesh, Spain, 140 9.7% 120 Italy Malaysia, Britain, the United States, Sri Lanka, parts of South Korea, France and Germany. 50.4% 100 Germany The government further implemented strict measures by halting the issuance of visas on- 80

8.0% (inthousands) 60 United Kingdom arrival starting from 27 March.

TotalInternationalArrivals 40 7.7% 20 Others - 7.4% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec On 15 April, Maldives declared a lockdown in in Male, Hulhmale, Villingili, Thilafushi, and Gulhifalhu, which has since been extended to 1 May. INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) Change from Previous Month Change from Same Time Last Year

200 Average Daily Rate Revenue Per Available Room Occupancy Rate Feb 2020 Mar 2020 Feb 2020 Mar 2020 180 1,000 100% 160 900 Visitor Arrivals -13.6% - -11.1% - 800 80% 140 700 120 Occupancy Rate -4.2 p.p. -35.3 p.p. -14.6 p.p. -36.7 p.p. 600 60% 100 500 ADR -19.1% -6.2% -11.5% -7.9%

80 (InUSD) (inthousands) 400 40% 60 300 RevPAR -23.6% -52.1% -26.4% -53.8%

TotalArrivalsVisitor International 40 200 20% 20 100 Key Government Initiatives and Measures 0 0% 0 2018 Jan 2018 Feb 2018 Mar 2019 Jan 2019 Feb 2019 Mar 2020 Jan 2020 Feb 2020 Mar 2018 2018 2018 2019 2019 2019 2020 2020 2020 • Jan Feb Mar Jan Feb Mar Jan Feb Mar MVR2.5 Billion Finance Package: The government has declared a MVR2.5 billion *Mar 2020 data not available package to provide financial support for the businesses experiencing economic loss Source: Ministry of Tourism Maldives , HVS Research as a result of COVID-19. The Bank of Maldives has announced a USD2 million 8 short-term financing facility for the tourism industry. Total Cases Number of Death Recovered Cases Myanmar 150 6 27 FR *As of 30 April 2020 On 29 February, Myanmar suspended visas-on-arrival for Chinese travellers. On 25 INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019) International Visitor Arrivals Y-o-Y Growth Rate Average Daily Rate Revenue Per Available Room Occupancy rate March, all Myanmar nationals and foreigners travelling to the country are required to

6,000 60% 200 100% present laboratory evidence of absence of COVID-19 infection and spend 14 days in a 5Y CAGR: 7.2% 5,000 50% 180 90% quarantine facility. This is subsequently revised on 29 March with a temporary 4,000 40% 160 80%

3,000 30% 140 70% suspension of all types of visas for all foreign nationals till 30 April.

2,000 20% 120 60% 1,000 10% 100 50% Measures implemented includes banning public gatherings, cancelling the Thingyan

(in (in thousands) 80 40%

0 0% (%)Y Growth Rate

- o

2014 2015 2016 2017 2018 2019 - traditional New Year water festival, banning festive activities, encouraging people to stay

-1,000 -10% Y 60 30%

(Inthousands/ MMR) Total International Visitor International Total Arrivals -2,000 -20% 40 20% home, shutting down public transportation networks, cinemas, as well as hotels and 20 10% -3,000 -30% guesthouses. On 17 April, Yangon region government imposed 10pm to 4am curfew for 0 0% -4,000 -40% 2014 2015 2016 2017 2018 2019 all 45 Yangon Townships, which has been extended for another two months until 18 June. Subsequently, on 18 April, seven townships with the highest number of COVID-19 cases SEASONALITY (2018 - 2019) SOURCE MARKETS (2019) including South Okkalapa, Pabedan, Bahan, Mayangone, Insein, Shwe Pyi Thar and Hlaing

2018 2019 Tharyar, were imposed with lockdown measures. 500 450 China ` Change from Previous Month Change from Previous Year 400 31.3% 350 38.8% Thailand Feb 2020 Mar 2020 Feb 2020 Mar 2020 300 Japan 250 Korea

200 Visitor Arrivals - - - - (inthousands) 150 United States

InternationalVisitor Arrivals 100 3.5% Others Occupancy Rate -8.8 p.p. -21.3 p.p. -5.3 p.p. -23.9 p.p. 5.8% 50 0 6.5% 14.2% ADR -1.4% -8.3% -12.4% -15.1% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec RevPAR -17.9% -52.9% -21.8% -58.8%

INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) Key Government Initiatives and Measures

400 • Comprehensive Economic Stimulus Plan: Comprises of seven goals, ten strategies, 36 Average Daily Rate Revenue Per Available Room Occupancy Rate 150 60.0% 350 action plans and 76 actions that cover a range of emergency fiscal and monetary 300 125 50.0% measures. K100 billion fund will be increased to K200-500 billion to assist garment

250 100 40.0% manufacturing, hotel and tourism sectors, as well as local small and medium-sized 200 enterprises. The interest rate on the loans will be 1% with a loan period of one year. 75 30.0%

(inthousands) 150 Eased deadlines for tax payments, and tax exemptions for affected Myanmar-owned 50 20.0% 100 (Inthousands/MMR) businesses. One-year exemption on license fees for hotel and tour businesses. TotalInternational Visitor Arrivals 50 25 10.0%

0 0 0.0% 2018 Jan 2018 2018 2019 2019 2019 2020 Jan 2020 2020 • The Ministry of Labour, Immigration, and Population announced deferments of 2018 2018 2018 2019 2019 2019 2020 2020 2020 Feb Mar Jan Feb Mar Feb Mar *2020 data not available Jan Feb Mar Jan Feb Mar Jan Feb Mar payment of social security contributions for employers and employees from 15 days Source: Myanmar Ministry of Hotels & Tourism, HVS Research to three months after the end of each month. 9 • From April 2020, investors who wish to apply for permission to invest in Myanmar will enjoy a 50% discount on application fees. Total Cases Number of Death Recovered Cases New Zealand 1,476 19 1,241FR *As of 30 April 2020 On 3 February, New Zealand has placed entry restrictions for visitors with recent travel INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019) history to China. Those who can enter the country must self-isolate for 14 days. The first International Visitor Arrivals Y-o-Y Growth Rate Average Daily Rate Revenue Per Available Room Occupancy Rate (%) 4,500 14.0% COVID-19 case in New Zealand was reported on 28 February. On 14 March, all visitors 5Y CAGR: 6.4% 225 100% 4,000 12.0% 200 95% must self-isolate for 14 days, except those arriving from the Pacific. Cruise ships are

3,500 175 90% 10.0% banned from the country. Strict border measures for people travelling from New Zealand 85% 3,000 150 80% to the Pacific are put in place, including health assessment requirements. On 19 March, 2,500 8.0% 125 75% 2,000 100 all foreign visitors were denied entry into New Zealand. On 26 March, New Zealand

6.0% (InNZD) 70%

Y GrowthY Rate(%) (inthousands) 1,500 - 75 o 65% entered a four-weeks lockdown. On 20 April, New Zealand extends the lockdown till 27

4.0% - Y 1,000 50 60% April.

TotalArrivalsVisitor International 2.0% 500 25 55%

0 0.0% 0 50% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 New Zealand has taken some measures to curb the virus spread, and it include cancelling of all indoor gatherings with more than 100 people from 19 March, the Auckland Council SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2019) has closed the pools, libraries, galleries and other community facilities for 14 days from

2014 2015 2016 2017 2018 2019 2020 20 March, and schools and other educational facilities across New Zealand were closed

600 Australia from 24 March. All non-essential businesses excluding essential businesses like 500 32.0% China supermarkets, pharmacies and medical clinics were closed. Travel will be severely limited 400 39.6% United States of America and healthcare services will be re-prioritised. On 27 April, New Zealand has eased its 300 United Kingdom social distancing measures. (inthousands) 200

TotalInternationalArrivals 100 Germany 2.5% 6.0% Change from Previous Month Change from Same Time Last Year 0 Others Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 9.5% 10.5% Feb 2020 Mar 2020 Feb 2020 Mar 2020 Visitor Arrivals - - - - INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) Occupancy Rate 6.3 p.p. -31.0 p.p. -4.6 p.p. -34.6 p.p.

450 Average Daily Rate Revenue Per Available Room Occupancy Rate 250 100% ADR 11.3% -11.7% -4.8% -9.6% 400

350 200 80% RevPAR 20.3% -44.3% -9.8% -45.3%

300

250 150 60% Key Government Initiatives and Measures

200 (InNZD)

(inthousands) 100 40% • NZD12 Billion Stimulus Package: NZD12 billion allocated includes NZD8 billion for 150

100 wage and income support, NZD2.8 billion in business tax changes to free up cash flow, TotalArrivalsInternationalVisitor 50 20% 50 NZD500 million boost for health services, and an initial NZD600 million support 0 0% 0 package for the aviation sector would be followed up with separate measures for Air 2018 Jan 2018 Feb 2018 Mar 2019 Jan 2019 Feb 2019 Mar 2020 Jan 2020 Feb 2020 Mar 2018 2018 2018 2019 2019 2019 2020 2020 2020 *Feb and Mar 2020 data not available Jan Feb Mar Jan Feb Mar Jan Feb Mar New Zealand Source: New Zealand Government, HVS Research 10 Total Cases Number of Death Recovered Cases Philippines 8,488 568 1,043FR *As of 30 April 2020 On 3 February, temporary travel ban was placed for all travellers coming from China. This INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019) International Visitor Arrivals Y-o-Y Growth Rate Average Daily Rate Revenue Per Available Room Occupancy Rate is followed by an entry ban for foreign visitors who come from countries with local 9 18% 6,000 100% transmissions of the virus on 12 March. On 22 March, the government issued temporary 8 5Y CAGR: 11.3% 16% 5,500 95% 5,000 travel ban on foreigners of all nationalities entering the Philippines. 90% 7 14% 4,500 85% 6 12% 4,000 3,500 80%Source: NationalOn 15Statisticaland Coordination17 March, Board , Departmentthe ofmetro Tourism,Philstar,Manila HVS Researchand Luzon were placed under community 5 10% 3,000 75% quarantine, respectively. This includes one-month of school, malls and establishment 4 8% (InPHP) 2,500 70%

(inmillions) 2,000 Y GrowthY (%)Rate closures, exempting shops offering essential services like groceries, banks and

3 6% - 65% o

- 1,500

Y 60%Arrivals 2 4% 1,000 pharmacies. Public transportation has been suspended. On 7 April, the government 55%

TotalArrivalsVisitor International 500 1 2% extended the Luzon lockdown by half a month to 30 April. Subsequently, on 24 April, the 0 50%STR 0 0% 2014 2015 2016 2017 2018 2019 government has announced that lockdown in Metro Manila, Central Luzon, Calabarzon, 2014 2015 2016 2017 2018 2019 ADR and several provinces and islands in Luzon will be extended until 15 May. SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2019) 2014 2015 2016 2017 2018 2019 2020 Change from Previous Month Change from Previous Year 900

800 24.1% Feb 2020 Mar 2020 Feb 2020 Mar 2020 Korea 700 29.7% 600 China Visitor Arrivals - - - - 500 USA Occupancy Rate -6.1 p.p. -24.1 p.p. -14.7 p.p. -35.8 p.p. 400 Japan

(inthousands) 300 Taiwan ADR -7.3% -16.7% -3.8% -17.3% 200 4.0% 21.1%

TotalInternational Arrivals Others 8.3% 100 RevPAR -15.9% -50.5% -22.9% -58.9% 0 12.9% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Key Government Initiatives and Measures INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) • PHP27.1 Billion Initial Spending Plan: PHP3.1 billion to better equip Department of

800 Average Daily Rate Revenue Per Available Room Occupancy Rate 6,400 80.0% Health in containing the spread of COVID-19. PHP14 billion is allocated to support the 700 5,600 70.0% tourism industry. Provide economic relief and recovery efforts for infected people as 600 4,800 60.0% well as affected businesses. This includes wage subsidy, unemployment benefits, 500 4,000 50.0% loans with zero interest to farmers, support micro-businesses and courses for 400 3,200 40.0%

(In PHP)(In displaced workers to acquire new skills.

(inthousands) 300 2,400 30.0%

200 1,600 20.0%

TotalInternational Visitor Arrivals • PHP275 Billion: PHP200 billion will be in the form of between PHP5,000 to 8,000 800 10.0% 100 cash grants for 18 million low-income households that lost their source of income due 0 0 0.0% 2018 Jan 2018 2018 2019 2019 2019 2020 Jan 2020 2020 2018 2018 2018 2019 2019 2019 2020 2020 2020 Feb Mar Jan Feb Mar Feb Mar Jan Feb Mar Jan Feb Mar Jan Feb Mar to COVID-19. *2020 data not available Source: Philippines Department of Tourism, HVS Research 11 Total Cases Number of Death Recovered Cases Singapore 16,169 14 1,188FR *As of 30 April 2020 On 31 January, Singapore bar visitors of any nationality with recent travel history to INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019)

International Visitor Arrivals Y-o-Y Growth Rate Average Daily Rate Revenue per Available Room Occupancy Rate mainland China. From 23 March, all short-term visitors from any countries were not

25 10% 250 100% allowed entry or to transit through Singapore. Singapore has also ceased port calls for all 5Y CAGR: 4.8% 8% cruise vessels. In addition, an MCO implemented by Singapore’s closest neighbour, 20 200 95% 6% Malaysia, to ban all Malaysians travelling abroad kicked in on 18 March.

15 4% 150 90% Due to its initial success in containing the virus, Singapore had been able to take a less

2% SGD) (In

10 100 85% (inmillions)

Y GrowthY Rate(%) draconian approach. However, as local cases spike, the government introduced circuit

- o

0% - Y breaker measures between 7 April to 4 May, which have been extended to 1 June. 5 50 80% -2% TotalArrivalsVisitorInternational Measures include one-metre social distancing, closure of workplace premises except for 0 -4% 0 75% essential services, full home-based learning for schools, closure of recreation venues, 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 attractions and places of worship. SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2019) Change from Previous Month Change from Previous Year

2014 2015 2016 2017 2018 2019 2020 Feb 2020 Mar 2020 Feb 2020 Mar 2020 2,000 45.0% China 1,750 Visitor Arrivals -56.6% -67.2% -51.2% -84.7% 1,500 Indonesia Occupancy Rate -32.1 p.p. -10.4 p.p. -37.5 p.p. -44.0 p.p. 1,250 India 1,000 19.0% ADR -1.1% -25.1% 2.1% -20.3% 750 Malaysia

(inthousands) 500 6.0% 250 Australia RevPAR -39.7% -40.5% -41.5% -61.9%

TotalInternational Arrivals 0 6.4% 16.3% Key Government Initiatives and Measures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 7.4% Others • SGD83.6 Billion Budget for 2020: SGD4 billion allocated to assist workers and companies amid COVID-19, and deferring the goods and services tax (GST) hike until INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) after 2021.

2,000 Average Daily Rate Revenue Per Available Room Occupancy Rate 1,800 250.0 100.0% • SGD48 Billion Resilience Budget: A property tax rebate of up to 100% for non- 1,600 200.0 80.0% residential properties, rental waivers, deferment of income tax payment for three 1,400

1,200 months, SGD48 million for self-employed persons (SEP) training support scheme, co- 150.0 60.0% 1,000 fund wage costs for up to 8,000 traineeships in 2020, flexibility on fees and loans,

800 (InSGD)

(inthousands) 100.0 40.0% more funding for community, cash grant of SGD800 a month for three months for 600 low- to middle-income citizens who became unemployed due to COVID-19 and SGD90 400

50.0 20.0% TotalInternational Visitor Arrivals 200 million for tourism recovery.

0 0.0 0.0% 2018 2018 2018 2019 2019 2019 2020 2020 2020 2018 2018 2018 2019 2019 2019 2020 2020 2020 Jan Feb Mar Jan Feb Mar Jan Feb Mar • Jan Feb Mar Jan Feb Mar Jan Feb Mar SGD5.1 Billion Solidarity Budget, SGD3.8 billion for Extension: SGD600 solidarity Source: Singapore Tourism Board, HVS Research payment to all Singaporeans aged 21 and above in 2020, 75% wage support in 12 April and May 2020 (differentiated by sector for remaining months), and three quarterly payouts of SGD3,000 each for eligible SEPs. Total Cases Number of Death Recovered Cases Vietnam 270 0 222FR *As of 30 April 2020 On 1 February, Vietnam halts all flights to and from mainland China and stop issuing visas INTERNATIONAL VISITOR ARRIVALS (2014-2019) HOTEL MARKET PERFORMANCE (2014-2019) for foreign visitors with travel history to China in the past two weeks. This is followed by a International Visitor Arrivals Y-o-Y Growth Rate Average Daily Rate Revenue Per Available Room Occupancy Rate 68.9% 20 40% 3,200 100% 2,848,864suspended entry for all foreign nationals on 22 March. All passenger flights to Vietnam on 5Y CAGR: 18.0% 18 35% 3,000 95% all airlines are also suspended from 1 to 15 April. 2,800 15 30% 90% 2,600 85% 13 25% 2,400 80% Apart from temporarily isolating several locations that are deemed high-risk or visited by 10 20% 2,200 75% travellers with confirmed cases of the virus, tourism sites across the country are also 2,000 (inmillions) 8 15%

Y Y Growth Rate (%) 70% -

o 1,800 - setting aside closure days to disinfect their premises. Until 15 April, Ha Long Bay, Bai Tu 5 10% Y 65%

(Inthousands/VND) 1,600 TotalArrivalsVisitor International 3 5% 1,400 60% Long Bay, Cat Ba Island, Ho Chi Minh City, Ninh Binh, Ly Son Island, Cham Islands, Phong 0 0% 1,200 55% Nha, Perfume Pagoda, Hue Citadel, My Son Sanctuary, and Con Dao will not be receiving 2014 2015 2016 2017 2018 2019 1,000 50% -3 -5% 2014 2015 2016 2017 2018 2019 any new visitors. A number of festivals and events in Vietnam have also been cancelled or postponed to avoid public gatherings. Other key actions by the government includes the SEASONALITY (2014 - MARCH 2020) SOURCE MARKETS (2019) temporary closure of public schools across 63 provinces, designation of four hospitals to

2014 2015 2016 2017 2018 2019 2020 handle potential cases, set up of 30 testing centres and 45 quick response medical teams 2,000 to assist hospitals nationwide. On 20 April, the country gradually ease COVID-19 control China 1,750 29.4% 32.2% 1,500 South Korea measures as cases plateau. 1,250 Japan Change from Previous Month Change from Previous Year 1,000 Taiwan 750 USA Feb 2020 Mar 2020 Feb 2020 Mar 2020 (inthousands) 500 4.1% 250 5.1% Others

TotalInternational Arrivals 0 5.3% 23.8% Visitor Arrivals -38.6% -62.3% -20.8% -65.7% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Occupancy Rate -17.3 p.p. -24.7 p.p. -17.1 p.p. -42.8 p.p. ADR -11.0% -10.3% -10.1% -11.0% INTERNATIONAL VISITOR ARRIVALS (JAN-MAR) HOTEL MARKET PERFORMANCE (JAN-MAR) RevPAR -36.1% -60.6% -35.2% -72.2% 2,000 Average Daily Rate Revenue Per Available Room Occupancy Rate 3,200 80.0% 1,800 Key Government Initiatives and Measures 2,800 1,600 70.0% • 1,400 2,400 60.0% VND27 Trillion: Tax breaks, delaying tax payments by five months, a reduction in land 1,200 2,000 50.0% lease fee and acceleration of state spending on infrastructure projects. 1,000 1,600 40.0%

800 (inthousands) 1,200

600 30.0% • From February, the central bank, State Bank of Vietnam (SVB), has already cut interest (In thousands/VND)(In

400 800 20.0% rates along with commercial banks in the country. In addition, Vietnam commercial TotalInternational Visitor Arrivals 200 400 10.0% banks pledged to offer VND 285 trillion preferential credit package to affected 0 2018 2018 2018 2019 2019 2019 2020 2020 2020 0 0.0% Jan Feb Mar Jan Feb Mar Jan Feb Mar 2018 2018 2018 2019 2019 2019 2020 2020 2020 businesses. Jan Feb Mar Jan Feb Mar Jan Feb Mar Source: Vietnam National Administration of Tourism, HVS Research • On 10 April, the government approved VND62 trillion financial support package 13 for poor people and businesses affected by the Covid-19 pandemic, over three months until June. HVS.COM About HVS About the Authors HVS, the world’s leading consulting and services organization focused on the hotel, mixed-use, shared ownership, gaming, Peggy Lee is an Analyst with HVS and leisure industries, celebrated its 40th anniversary this Singapore She graduated from year. Established in 1980, the company have performed Singapore Institute of Technology with a Bachelor of Degree in more than 60,000 assignments for hotel and real estate Hospitality Business. Since joining, owners, operators, and developers worldwide. HVS principals she has been engaged in numerous are regarded as the leading experts in their respective market research, feasibility studies regions of the globe. Through a network of more than 50 and valuations in the Asia Pacific region that include Malaysia, Maldives offices and more than 300 professionals, HVS provides an and Singapore. [email protected] unparalleled range of complementary services for the hospitality industry. Chariss Kok Xin is a Manager with HVS.com HVS Singapore. She graduated from Glion Institute of Higher Education with a Bachelor of Arts in Hospitality Superior Results through Unrivalled Hospitality Real Estate Finance and Revenue Intelligence. Everywhere. Management. Since joining, she has been engaged in numerous market research, feasibility studies and HVS ASIA PACIFIC is represented by nine offices in Singapore, valuations in the Asia Pacific region Bangalore, Bangkok, Beijing, Hong Kong, Mumbai, New Delhi, that include Indonesia, Malaysia, Shanghai and Shenzhen. HVS publishes a wide range of Maldives, Papua New Guinea, Philippines, Seychelles and leading research reports, articles and surveys, which can be Singapore. [email protected] downloaded from our online library (HVS.com/Library). Hok Yean Chee is the Regional President of HVS Asia Pacific. She has HVS SINGAPORE has worked on a broad array of projects over 30 years of experience in more that include research studies, valuations, feasibility studies, than 30 markets across 23 countries operator search and management contract negotiation, in Asia Pacific, providing real estate investment advisory services for a testimony and litigation support services, asset management, wide spectrum of property assets. and investment advisory for hotels, resorts, serviced Her forte lies in providing investment residences, branded residences, golf courses, country clubs, advisory on hotels and serviced marinas and cruise terminals. apartments, including brokerage, strategic analyses, operator search, market feasibility studies, valuations and litigation support. [email protected]

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