Growth of the Asian hotel market appears to have slightly slowed this year, but it holds a promising outlook for the mid- and long term, according to a report by a global real estate consulting firm.

In its report “The Asia Hotels View 2014,” Cushman & Wakefield also forecast that the Asia-Pacific region would recover much of its growth by 2014 with the exception of Seoul, which may take an additional two to three years.

The company’s report, which analyzed hotel markets across 23 cities, showed that Asia would see yet another record year of international tourists.

In terms of number of visitors, the first half of 2013 saw 8 percent growth on a year-on-year basis. There were 221.5 million international tourists last year, which was also 7.2 percent higher than the previous year, the report said.

Despite the continuously growing number of tourists each year, a sizable addition in hotel room inventory can lead to unoccupied hotel rooms, drive prices down and ultimately see revenue take a fall.

Hotel markets and performances can be evaluated by revenue per available room, or RevPAR. Under this indicator, hotel markets across Asia generally saw positive growth in 2012 with the exception of Mumbai, the National Capital Region of India and a few others, according to the report.

In 2013, however, there were more mixed outcomes where hotel performances in markets such as Singapore and Shanghai lagged behind, while other emerging markets like Dhaka, Yangon and Colombo have displayed ― and are continuing to display ― large growth in revenue, mainly attributed to the synergy between their limited stock of high-end hotels and vigorous demand, said the report.

According to C&W, hotel markets across Asia are experiencing continuous growth in their pipeline and room stocks both in terms of international and domestic brands.

As a result, the overall RevPAR for this year is expected to fall short of that of 2012.

“(We) expect much of the excess supply to get absorbed soon on the back of strong tourism demand. As occupancy starts increasing, we will see room rates rising upwards in most markets. RevPAR growth in Asian hotel markets is expected to turn positive in 2014. The only exception is likely to be Seoul, which is seeing an unprecedented pipeline of at least 15,000 rooms over the next two to three years, doubling the current supply,” said Akshay Kulkarni, the regional director of C&W’s hospitality sector for South Asia and Southeast Asia.

Moreover, in the market for hospitality investment, Asia has seen heavy capital investment in Japan, Singapore and China. C&W anticipates that the investment volumes for this year will reach anywhere between $10 billion and $12 billion ― the highest it’s seen since the global financial crisis.

“While concerns remain over the fluctuations in exchange rate and expected new supply entering the market in the near future, Seoul’s hotel market is expected to continue to grow in the mid- to long term, thanks to the growing demand from China that is lessening the effects of the decline in demand from the Japanese market,” added Cushman & Wakefield Korea senior manager Jin Soo-hyun.

“The upcoming major international events, including the 2014 Incheon Asian Games and the 2018 PyeongChang Winter Olympics, are likely to enhance the awareness of Korea as a tourism destination,” she said.

By Kim Joo-hyun (jhk@heraldcorp.com)