Vietnam expected to lead the way in profitability, while
Greater China could struggle under the weight of intensifying cost pressures
and margin compression.
ASIA PACIFIC – Asia Pacific hotel operators are aggregately
predicting gross operating profits to increase between 2% and 6% year-on-year
in 2026, according to JLL’s APAC Hotel Operators’ Sentiment Survey 2025/2026.
Fully, 17% of respondents cited geopolitical uncertainty as
the biggest risk to hotel operating performance in 2026, ahead of economic
slowdown (15%), increase in competition (15%) and inflationary pressures
(11%).
“With the backdrop of volatility, the hotel sector in Asia
Pacific continues to perform robustly and we expect continued growth in
operational profits in 2026,” said Xander Nijnens, senior managing director, head
of Advisory and Asset Management, JLL’s Hotels & Hospitality Group, Asia
Pacific.
Tourism in Asia Pacific continues to show sustained growth,
with international visitors increasing by 10.7% in the first half of 2025,
according to UN Tourism. This backdrop has resulted in hotels in the region
achieving steady improvements RevPAR on average, specifically as operators have
managed this by raising their rates to offset slightly lower occupancy levels
compared to a strong base last year.
Vietnam has been identified by operators as the expected regional
standout in terms of profitability growth in 2026, relative to 2025, reinforced
by a strong 6% growth forecast in gross operating profit (GOP). India follows
with an expected 6% increase in total revenue versus an anticipated 4% rise in
GOP from 2025. Japan and South Korea round up the growth leaders with projected
profitability growth of 4%, with both markets benefiting from strong travel
demand and constrained supply.
Conversely, several key markets face headwinds, with Greater
China continuing to defy regional sentiment trends, where profits are expected
to contract at an accelerated pace relative to revenue declines, a dynamic that
suggests intensifying cost pressures and margin compression along with a
continued challenged hotel demand, according to JLL’s report.
Additional key findings:
- Approximately three in five hotels express optimism about
their food and beverage performance in 2026, with operators expecting stable
margins. Lifestyle brand hotels are particularly bullish about F&B
prospects.
- The survey reveals that one in two hotels continues to
experience talent departure primarily driven by employees seeking better
compensation packages, whether within the hospitality industry or in other
sectors. Despite salary being the leading reason for employee turnover, salary
increases rank only fifth among measures implemented by operators to retain
talent.
- Product optimization is leading capital expenditure efforts,
with operators prioritizing asset preservation and efficiency improvements. The
top three capex priorities for 2026 include operating systems
investment, mechanical, electrical, plumbing (MEP) systems and brand standards
compliance.
- Fully, 30% of hotels in the APAC region have achieved
sustainability ratings, with brand standards continuing to be the driver for
hotels investing in sustainable practices. However, operators identify
persistent challenges, including limited funding availability for
sustainability initiatives, lack of visibility on return on investment for
green technologies and the need for clearer metrics to measure sustainability
impact. Despite these challenges, progress continues in incorporating
sustainability measures, driven by both guest demand and corporate
responsibility commitments.
“The 2025/2026 survey results demonstrate an industry that
has learned to navigate uncertainty while maintaining strategic focus,” Nijnens
said. “The projected GOP growth of 2% to 6% reflects operators’ confidence in
their ability to drive both revenue and operational efficiency improvements.
With profit grow decelerating in many markets, owners must work much harder to
unlock value in their assets and to drive performance uplift. Embracing
innovation, adopting new technologies, and leaning into experiential and
lifestyle trends are avenues to creating this uplift.”