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• Two years since the onset of the COVID-19 pandemic, there is light at the end of the tunnel for the Asia Pacific hotel sector as more markets across the region ease border restrictions in an attempt to reboot business and leisure travel.

• CBRE expects improvements in visitor arrivals and room occupancy to begin to emerge in Q2 2022, with Southeast Asian leisure markets set to outperform as tourists seek out open-air environments.

• Other key trends anticipated to emerge this year include consumers gravitating to trusted hotel brands, taking longer trips and placing a stronger emphasis on hotel ESG performance.

• This year will also see a further improvement in hotel investment volume as newcomers and experienced investors seek greater exposure, with the weight of capital chasing Asia Pacific hotels now at an all-time high.

This report was originally published in https://apacresearch.cbre.com/en/research-and-reports/Asia-Pacific-Hotel-Market-Outlook_Trends-to-Watch-in-2022

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The region’s equities continued to struggle for direction in February ahead of the looming Fed hike. However, Russia’s incursion into Ukraine put paid to investors expectations looking to buy the dip. The conflict and subsequent sanctions heightened selling pressure, as volatility rose across global capital markets. Energy prices and commodity prices surged amid concerns on the supply of Russian oil and gas as well as agricultural produce from the region. The likelihood of even higher inflation revived fear of a 70s-style stagflation, which will drag on the fragile recovery from the pandemic. Returns from Asia Pacific equities, as measured by MSCI, fell into the red as investors sold down riskier assets. Still, with inflation racing, bond markets ended little moved as investors remained braced for higher rates, given the Fed’s resolve to anchor inflationary expectations. However, the episode underscored the resilience of the region’s REITs, which managed to eke out a marginal gain as its defensive qualities shone.

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The region’s markets opened 2022 in negative territory due to expectations of rising inflationary pressures, a potential reversal of quantitative easing, and higher interest rates. In its first meeting of the year, the Fed indicated that a rise in its benchmark rate will soon be appropriate with inflation running well above target and the labor market approaching maximum employment. This means the initial quarter-point rate-hike of the cycle is likely to kick in at the next Fed meeting in March. Asset purchases will also be cut to US$30 billion in February and come to a halt by March. Analyst are now penciling in a more aggressive tightening cycle of at least a 25-bps hike at each of the Fed’s meetings for the rest of the year. REITs bore the brunt of the negativity to underperform both bonds and equities in January.

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The enhanced principles were based on feedback from industry participants and stressed the importance of stewardship outcomes.

31 March 2022, Singapore – Stewardship Asia Centre (SAC) today released the second edition of the Singapore Stewardship Principles (SSP) for Responsible Investors, updating practices to enhance Singapore's investment environment. The revisions were driven by a 10-member steering committee, supported by the Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX).

Singapore first introduced the principles in 2016, outlining practices related to the core behaviour and actions associated with stewardship to promote active and responsible investment.  Since then, capital markets have undergone profound developments as global concerns intensified over the impact of financial investments on the economy, society and the environment. Stakeholders emphasised that investors should become better stewards by demonstrating a genuine intent to deliver sustainable performance and long-term value to clients and beneficiaries, as well as to factor in environmental, social and governance (ESG) considerations. The steering committee took into account the global market developments in shaping the principles. An industry survey was conducted in March 2021 to garner feedback from the asset management industry on their perspective of investment stewardship. This was followed by an open consultation to obtain stakeholders’ feedback on the draft of the updated SSP in November 2021.

“We received feedback from more than 20 stakeholders. These recommendations were taken into consideration to enhance the principles in the areas of internal structures and governance, stewardship beyond listed companies, and ESG considerations. We urge the financial services and investment industry to adopt the updated SSP and make a greater commitment towards responsible investment,” said Rajeev Peshawaria, CEO of SAC.

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