Room supply to grow by 4% and demand by 7% in 2019

ANAROCK-HVS-revisedHVS ANAROCK recently released its industry review for 2018. According to the report, the supply of rooms is anticipated to grow by 4.0% and demand by 7.0% in 2019. Over the last 2 years, hotel supply grew by 3.7% in 2017 and 3.5% in 2018, whilst demand grew by 7% and 6.8% in the respective years. While both the past years have paved the way for strong growth in demand for 2019 driven by strong economic growth in the country, some headwinds in 2019 are expected to dampen the performance turnout for the year. The first major reason is the country’s general election, during which the commercial market, the main stay for hotels in the country, puts on hold all decision making in anticipation of the election results that could potentially have a material impact on several policy initiatives of the government. Thankfully though, elections will be held in the summer months when demand in the country is comparatively low, limiting its negative impact on hotel performances.The second major reason is the impact of new hotel supply that is expected to commence operations in the current year. As per our estimates, 8,574 keys will enter the market in 2019, a nearly 19% rise over the last two years