[Source/Observer Network Deng Jun Editor/Zhao Qiankun]

According to reports from the U.S. travel industry media Skift, recently, Nihat Ercan, CEO of JLL Hotels & Hospitality Group Asia Pacific, said that the transaction volume of hotels in the Asia-Pacific region reached $12 billion in 2024, a year-on-year increase of 3.3%. Nihat Ercan expects that despite fluctuations in the global market, this momentum will continue to grow.

The report mentioned that the number of international arrivals in the Asia-Pacific region reached 316 million in 2024, rebounding significantly compared to previous years, but still about 13% lower than pre-pandemic levels.

Nihat Ercan believes that visa exemption policies are encouraging more tourists to visit the Asia-Pacific region.

"We actively call for bidding in the region. In the past two weeks, we have made a new bid on a major hotel in Sydney and just received an offer for another hotel in Melbourne," said Nihat Ercan. "I believe that short-term fluctuations in the open market further indicate investors' desire for diversification and investment in hard assets such as hotels, creating conditions for more positive growth and prospects in hotel transactions."

However, can the profitability of the hotel industry, as a highly globalized industry dependent on complex international supply chains, remain sustainable under economic volatility?

Previously, President Trump's tariff policies have caused widespread concern in the hotel industry, with stocks of related U.S. companies such as hotels generally declining.

Hotel experts analyze that from a global supply chain perspective, tariffs may bring "storm-level" challenges to the global hotel industry.

In Europe, due to multiple factors such as tariffs, anti-American sentiment, and concerns about the handling of international relations, the hotel industry faces complex and multifaceted impacts.

Data from Eurostat shows that tourism contributes nearly 20% to Greece's GDP. If the EU's overall economic growth slows by 1 percentage point, it could lead to a 3%-5% decline in the number of inbound tourists to Greece.

According to information from the international travel media Travel Weekly, Richie Karaburun, professor at the Jonathan M. Tisch Center of Hospitality of New York University, believes that tariff policies will affect the daily operations and future development of American hotels.

New York City night view outside the hotel window, Visual China

It is reported that American hotels are currently in trouble. For example, the import costs of hotel linens and supplies (such as sheets and towels) from Vietnam, Cambodia, and Indonesia have surged significantly. Due to these countries' related goods being subject to up to 49% tariffs, coupled with changing visa policies, and the impact of safety issues on American tourism, the pressure on the American hotel industry is increasing, exacerbating the challenges faced by the industry.

The report also mentioned that the construction of new hotels in the United States will face a series of severe challenges that may curb industry growth.

Michael Bellisario, senior hotel research analyst at Baird, said that the cost of international materials, furniture, fixtures, and equipment imported from China and Vietnam typically accounts for 15% to 20% of the total project budget. With the increase in tariffs, this cost may rise by 5% to 10%.

This change will undoubtedly put considerable pressure on the financial planning of American hotel developers, further exacerbating the cost challenges facing the industry. However, given the rising cost pressures, the options available to the American hotel industry are particularly limited.

Richie Karaburun said that large hotel brands with strong purchasing power (such as Marriott and Hilton) may force suppliers to absorb part of the tariffs, while some real estate developers may have to bear these additional costs themselves, which will inevitably compress profit margins and may even trigger layoffs. Additionally, hotels may pass on the new costs to consumers by raising room rates and food prices.

This response strategy may lead to a broader contraction in American tourism.

A research report by Bernstein Research Company shows that the new round of tariff policies is expected to cause a slowdown in the growth rate of U.S. hotel RevPAR (Revenue Per Available Room) - from the originally expected 3.1% to only 0.9%-1.9%, or even lower levels.

Richie Karaburun warned that prolonged trade wars would trigger a "race to the bottom" (referring to a downward spiral competition).

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Original source: https://www.toutiao.com/article/7493016895857050152/

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