Vietnam’s Promising Profitability in the Asia Pacific Hotel Sector
The Asia Pacific hotel industry is poised for growth, driven by optimism and a strategic response to ongoing challenges. According to the JLL’s APAC Hotel Operators’ Sentiment Survey for 2025/2026, hotel operators in the region are anticipating gross operating profits (GOP) will rise between 2% and 6% year-on-year by 2026. This optimistic forecast highlights the resilience and adaptability of the hotel sector amidst prevailing uncertainties.
Key Risks and Challenges
Despite the anticipated growth, survey respondents identified geopolitical uncertainty as the foremost risk to hotel performance, with 17% citing it as a concern. Other notable risks include economic slowdowns and increasing competition (both at 15%), along with inflationary pressures (11%). These factors underscore the complexity of the landscape in which hotel operators are navigating.
“Amidst volatility, the hotel sector in Asia Pacific continues to perform robustly, and we expect continued growth in operational profits in 2026,” remarked Xander Nijnens, senior managing director and head of Advisory and Asset Management at JLL’s Hotels & Hospitality Group for Asia Pacific. This sentiment reflects a cautious but optimistic engagement with the current market dynamics.
Rising Tourism and Revenue Per Available Room
Tourism in the Asia Pacific region is showing signs of sustained recovery, with international visitor numbers growing by 10.7% in the first half of 2025, as reported by UN Tourism. This influx of travelers has contributed to improved revenue per available room (RevPAR) across the region. Operators have successfully managed to raise accommodation rates, compensating for slightly lower occupancy levels compared to the previous year, which had set a high benchmark.
Vietnam: A Standout Performer
Vietnam is emerging as a leader in profitability growth within the region, with a projected 6% increase in GOP for 2026 compared to 2025. Following closely is India, expecting a 6% rise in total revenue and a 4% boost in GOP. Japan and South Korea are also showcasing promising profitability growth of 4%, buoyed by robust travel demand and limited supply in the market.
Struggles of Greater China
In contrast, Greater China is experiencing a decline, with profits expected to contract more significantly relative to revenue declines. This trend suggests escalating cost pressures and margin compression, compounded by a consistently challenging hotel demand within this key market. This divergence offers stark insights into the varying trajectories of hospitality recovery across the region.
Optimism in Food and Beverage Performance
Notably, around three in five hotels remain optimistic about their food and beverage (F&B) performance heading into 2026. Operators foresee stable margins, especially among lifestyle brand hotels, which appear particularly positive about their F&B prospects. This indicates a continuing focus on enhancing the guest experience, as food and beverage offerings increasingly play a crucial role in attracting visitors.
Staffing Challenges and Employee Retention
However, the hotel sector faces significant staffing challenges. Half of the hotels surveyed reported ongoing talent departures, primarily driven by employees seeking better compensation, whether within the hospitality industry or outside it. Despite this, salary increases rank fifth among the measures operators have implemented to retain talent, signaling a disconnect between salary incentives and retention strategies.
Capital Expenditure Priorities
Looking ahead to 2026, operators are prioritizing product optimization in their capital expenditure plans. Key areas of investment include enhancing operating systems, upgrading mechanical, electrical, and plumbing (MEP) systems, and ensuring compliance with brand standards. This focus on efficiency and asset preservation underscores a strategic approach to navigating the uncertain waters ahead.
Sustainability Initiatives in the Industry
Sustainability remains a pivotal focus for the industry, with 30% of hotels in the APAC region achieving sustainability ratings. Brand standards are driving investments in sustainable practices, although operators pinpoint ongoing challenges such as limited funding for sustainability initiatives. The lack of clear metrics to measure the impact of green technologies continues to hinder progress. Nevertheless, pressure from corporate responsibility commitments and guest demands are driving enhancements in sustainability measures throughout the sector.
Strategic Focus for the Future
The findings from JLL’s survey reflect an industry adept at managing uncertainty while maintaining a clear strategic focus. The projected growth in GOP, ranging from 2% to 6%, reinforces operators’ confidence in their capacity to enhance both revenue and operational efficiencies. As profit growth rates decelerate in various markets, hotel owners must work diligently to unlock the value of their assets and improve overall performance.
Operators are embracing innovation, adopting new technologies, and leaning into experiential and lifestyle trends to create uplift in their performance. This proactive approach aims to address not just the immediate challenges but also the long-term demands of an evolving hospitality landscape.