Market Snapshot: Asia Pacific 2025

Transactions in the Asia Pacific

In 2024, hotel transaction volume in the Asia Pacific recorded approximately USD11.5 billion, a modest 3% decrease from USD11.9 billion in 2023. While activity has softened, the pace of decline has significantly improved compared with the sharper 14% decline recorded between 2022 and 2023. The slowdown can be attributed not only to elevated borrowing costs but also to factors such as prolonged transaction timelines due to cautious due diligence and lingering macroeconomic uncertainties across major markets. On a trailing 12-month basis, transaction volume decreased 9% from USD12.4 billion to USD11.2 billion, with deal count easing from 492 to 456. Despite this, the narrowing pace of decline, together with resilient travel demand and selective regional growth, suggests that investors are likely to remain cautiously optimistic and selective.

Transaction History in the Asia Pacific (2020 - 2Q 2025)

Source: HVS Research, See Reference List 16
*Please note mentions of "transaction values" pertain to the transaction volume based on relevant stake/interest as of the mentioned date

Top Three Most Active Markets (3Q 2024 to 2Q 2025)

Both transaction activity, measured by the number of completed transactions, and transaction volume for hospitality assets showed varied trends in China, Japan, and South Korea over the last four quarters. Despite a notable slowdown with transaction volumes declining by 54% year-on-year (YOY) to USD2.1 billion, with a decrease in deal count from 97 to 76 in China, the country remains of the top 3 most active markets in Asia Pacific. This reflects a more cautious domestic investment environment, with investors adopting a wait-and-see approach. Japan saw further momentum, with transaction volume rising 15% to USD3.5 billion, attributed to strong inbound tourism demand and continued yen weakness. South Korea also registered growth with a 25% YOY increase in transaction volume to USD1.7 billion despite a slight reduction in the number of deals. The uplift underscores selective confidence in the hospitality sector, especially in Seoul, where international investors are beginning to return.

Transaction Volume in Top Three Most Active Markets (3Q 2023- 2Q 2025)

Source: HVS Research, See Reference List 16
*Please note mentions of "transaction values" pertain to the transaction volume based on relevant stake/interest as of the mentioned date

Major Investors in the Asia Pacific

In 2024, transaction activity from the top ten investors in the Asia Pacific accounted for approximately USD5.1 billion or 29% of total transaction volume.

The year saw a diverse mix of domestic and cross-border investments, reflecting both opportunistic acquisitions and portfolio-driven strategies, By number of transactions, China-based Hillhouse Capital led the pack with 20 deals, followed by US-based KKR with 16 transactions. Japan-based Mizuho Leasing was also active, recording five transactions.

Top Ten Investors by Transaction Volume (2024)

Source: HVS Research, See Reference List 16
*Please note mentions of "transaction values" pertain to the transaction volume based on relevant stake/interest as of the mentioned date

Hotel Performance in the Asia Pacific (2025)

Hotel performance across APAC in 2025 shows a mixed but generally stabilising picture, with growth concentrated in selected markets. India stands out as one of the region’s strongest performers, with Delhi, Mumbai, and Bengaluru all registering solid RevPAR gains on the back of resilient domestic demand and improved rate traction. Japan also delivers strong results, supported by international travel demand, while Vietnam posts robust uplift, particularly in Ho Chi Minh City where both corporate and leisure segments continue to expand. Mature hubs such as Singapore and Hong Kong maintain high occupancy levels with rates moderating, while Australia sustains steady recovery momentum. Resort markets diverge, with Maldives and Langkawi benefitting from rate-led growth, but Phuket and Bali softening.

The top five markets for growth in 2025 are Osaka, Bengaluru, Ho Chi Minh City, Langkawi, and Tokyo, underscoring the strength of Japan, India, and Vietnam in particular. Overall, Asia Pacific’s hotel sector is expected to sustain its upward momentum, though growth remains largely rate-driven rather than occupancy-led. On the downside, Thailand is forecasted to see the sharpest contractions, with both Bangkok and Phuket affected by softer demand linked to traveller safety perceptions and the comparison against exceptionally strong 2024 results. Other markets, including Beijing, Shanghai, Jakarta, and Auckland, also recorded modest declines, reflecting more competitive conditions and demand headwinds.

Hotel Performance in Asia Pacific (2025)

Source: HVS Research, See Reference List 4

Australia

Key Points

Source: See Reference List 1, 6, 21, 25
*Include non-branded hotels

Infrastructure Projects

AUD13.5 billion Melbourne Metro Project, which will deliver a new rail line across Melbourne CBD to complete construction by Dec 2025
AUD7.4 billion development of Western Harbour Tunnel under Sydney Harbour by 2028
AUD220.0 million redevelopment of Circular Quay in Sydney by 2028
AUD4.1 billion upgrade of Sunshine Station to connect to Melbourne’s west by 2030
AUD3.0 billion construction of a third runway for Melbourne Airport by 2031
Sydney Airport 2045 Masterplan:
- Expanding domestic terminal
- Constructing new terminal connecting existing T2 & T3 (both domestic)

Notable Transactions in Sydney and Melbourne

245-key Park Hyatt Melbourne acquired for AUD205.0 million (AUD836.7k/key) in Aug 2025
105-key Sir Stamford at Circular Quay in Sydney acquired for AUD265.0 million (AUD2.5m/key) in Feb 2025
191-key Melbourne Place Hotel acquired for AUD150.0 million (AUD785.3k/key) in Jan 2025

Notable Upcoming Hotel Brands Openings in Sydney and Melbourne (2025 - 2029)

25Hours Hotel, MOXY, QT, The Hoxton, Waldorf Astoria

Hotel Pipeline

112 hotels, 5,735 keys in 2025
151 hotels, 49,953 keys by 2029
Overall room growth (2025 – 2029): 14.8%

Hotel Pipeline (2025 - 2029)

Source: HVS Research, See Reference List 4
*Include non-branded hotels

Hotel Performance Metrics

YTD Jul 2025

Sydney recorded growth across all key performance metrics, underpinned by sustained corporate demand and steady international arrivals. Melbourne saw occupancy gains but flat ADR, suggesting heightened price competition despite stronger demand. Both cities are expected to finish 2025 with a stronger hotel performance.

Source: HVS Research, See Reference List 4

Transactions

As of YTD Aug 2025, transaction volumes in Australia have surpassed the total recorded in 2024, reflecting a rebound in investor confidence and a stronger deal pipeline. Improved economic stability driven by moderating interest rates, weaker Australian dollars, and pent-up demand from delayed transactions in 2023–24 have contributed to this uplift.

Transaction Value Recorded By Region (2020 - YTD Aug 2025)

Source: See Reference List 16