CEO Choe Peng Sum said the group’s Asian properties performed well in the first quarter before demand dropped sharply in the second quarter because of the war between the U.S. and Iran, according to Channel News Asia.
Occupancy and average room rates recovered in the third quarter, and the group expects the improvement to extend into the final three months of the year.
“With that upswing, we’re beginning to see that we can probably cover our budgets for the whole year.”
The conflict disrupted travel from the Middle East to the group’s hotels in Kuala Lumpur, Jakarta and Bangkok, he said. Demand from leisure and business travelers later recovered.
The rebound comes as Pan Pacific proceeds with 10 new construction and major renovation projects across Southeast Asia in 2027, according to EdgeProp Singapore.
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Pan Pacific Singapore. Photo courtesy of Pan Pacific Hotels Group |
The projects cover Singapore, Malaysia, Thailand, Vietnam, Indonesia, Cambodia and the Philippines, including new luxury hotels in Bangkok and Phnom Penh.
Choe also said that higher travel costs and geopolitical uncertainty are reshaping affluent travelers’ vacation plans, with more choosing destinations nearer home.
“We’re beginning to see a lot of luxury travellers … are taking shorter haul (trips),” he said, adding that more Asian travelers are vacationing within the region.
Those scaling back on long-distance trips are not necessarily reducing their spending on hotels and experiences, he said.
“People are willing to pay for experience, not just a bed to sleep in,” Choe said, noting continued demand for hotel club lounges among guests willing to spend more on premium offerings.
Southeast Asian growth
Choe singled out Vietnam, Malaysia and Singapore as Southeast Asian markets seeing particularly strong demand.
Vietnam’s tourism expansion is spreading beyond HCMC and Hanoi to resort destinations, while growth in high-tech industries is attracting more business travelers, he said.
The group’s hotels in Kuala Lumpur, Penang, Langkawi and Malacca have also posted strong occupancy and average room rates.
Its Singapore properties achieved double-digit growth in the third quarter, supported by major international events, including the Formula 1 Grand Prix and business conferences, Choe said.
Shifts in Chinese travel patterns are providing another boost to Southeast Asia, with tensions between China and Japan redirecting some travelers to the region, he added.
“It’s now no longer just tour groups. It’s a lot of affluent free independent travellers from China and India coming through,” Choe said.
“We’re beginning to see a lot of that growth in our region: shorter haul, spending more money, experiencing Instagrammable Southeast Asia.”
Pan Pacific Hotels Group, the Singapore-based owner of the Pan Pacific and Parkroyal brands, owns or manages about 50 hotels worldwide with more than 14,000 rooms, according to its parent company UOL Group.