With SEAHIS 2026 coming up next week, we look into the issues currently facing hospitality real estate throughout the region
Last week, we had the opportunity to interview HOFTEL co-founder and chair Simon Allison ahead of the South East Asia Hotel Investors’ Summit (SEAHIS) which is set for next week in Bangkok, Thailand.
In the interview, Allison pointed out that, despite the fact that the crises impacting the global economy, regional priorities in hospitality investment remain the same.
He pointed out that institutional investors remain keen on Japan, but Australia and South Korea have also piqued their interest as these are markets that are both liquid and transparent.
Allison added: “Vietnam is very much in vogue with a massive rebound from the property crisis a few years ago and Thailand is probably suffering from that along with its overall economic stagnation.”
But while the overall outlook seems good for Southeast Asia, the region continues to face a number of issues which are being driven by current socioeconomic circumstances.
For the most part, experts have pointed out five major issues currently affecting hospitality real estate and investment.
Oversupply is affecting Thai hospitality
One pressing matter is the oversupply in key regional markets, particularly urban centres like Singapore and Bangkok; and, particularly in the case of Thailand, major resort destinations like Pattaya, Phuket, and Koh Samui.
In a February 2026 report, STR senior data analyst Marielle Malabanan wrote: “Some of Bangkok’s slump could be attributed to an increase in supply, which has grown for all classes, only slowing down for the mid-classes. Phuket also had an even higher surge in supply, which contributed to the decrease in occupancy growth.”
According to Malabanan, Bangkok’s supply growth was at three percent as of end-2019, with occupancy and ADR softening for the first time in five years; this pattern appeared again in 2025.
Over all, this has resulted in compressed average daily rates (ADR), forcing property owners and managers to rethink asset positioning to maintain competitiveness.
Rising costs
With the continued closure of the Strait of Hormuz and restrictions in West Asian waters and airspace, it’s not surprising that the price of crude oil continues to soar to alarming heights; and with it the cost of just about everything else.
Hospitality firms throughout the world are wincing at the way operational costs are rising, significantly cutting into development and operating margins.
Energy costs, in particular, are proving to be the bane of Southeast Asian hospitality despite the surge in travel demand.
Paul Hiriart, vice-president for business development in APAC for the Hotel Solutions Partnership (HSP), explained that hotels depend heavily on electricity and fuel to operate the diverse systems necessary to provide comfortable stays for their guests.
He likewise pointed out how, especially in tropical destinations across Southeast Asia, this dependency is even greater, with cooling systems making up a significant portion of each property’s total power consumption.
Hiriart added: “The impact is especially visible in resort environments. Large beachfront and island resorts typically operate energy-intensive infrastructure such as multiple swimming pools, extensive landscaping irrigation systems, large air-conditioned public areas, spas, and high-capacity kitchens. Maintaining these facilities while delivering the level of comfort expected by guests requires substantial amounts of energy. As utility costs increase, the profitability of these resorts becomes far more sensitive to operational efficiency.”
The scenario is particularly dire for owners with multiple properties as the total impact of energy spending on the bottom line gets substantial.
Staff retention remains a challenge
Back in April, we did a feature on how global hospitality struggles to fill positions, with up to 70 percent of hotels reporting a severe lack of human resources.
To deal with the issue, experts continue to remind hotels that the ongoing skilled-staff shortage requires significant, continuous investment in training and employee well-being.
In which case, properties lacking adequate human resources risk a decline in service quality, directly impacting consumer appeal and overall profitability.
Diverse hiring has been seen as a solution to this crisis, but its impact has yet to be felt within much of Southeast Asia.
The challenge of keeping up with evolving traveller preferences
Finally, keeping up with the rapidly shifting preferences of the modern-day traveller, especially those from younger generations, has proven a challenge for most hospitality providers.
Especially in the case of luxury properties, it is more challenging now to impress guests in light of the growing demand for authentic local experiences, as well as the growth of the blended travel sector.
It goes without saying that properties that cannot deliver on a curated mix of business and leisure (bleisure) amenities, openly seen sustainability measures, and integrated wellness offerings stand to lose their biggest spending customers.
In all honesty, there are no easy solutions to any of these issues we have presented, but maintaining flexibility, the willingness to make shifts towards more regenerative practices, and capitalising on niche markets like concert tourism and sports tourism could provide properties the winning formula to get through the crisis and come out shining.