• Negotiating Management Agreements during an Economic Downturn - Some Thoughts
  • October 21, 2009 | Authors: Andrew P. B. MacGeoch; David S. C. Mallinson
  • Law Firm: Mayer Brown JSM - Hong Kong Office
  • The downturn in the global economy sparked by the credit crunch has had a significant effect on the hospitality and leisure industry both in terms of operations and development. According to STR Global's figures for Asia Pacific, in July 2009, hotel occupancy dropped 6.3% to 61.7%, ADR dropped 15.9% to US$113.20, and RevPAR dropped 21.2% to US$69.83 compared to July 2008. We also know of a number of hotel projects that are currently on hold as developers struggle to come up with the financing required. However, "Asia showed slight signs of improvement in July, with many markets falling less than the previous month" according to the managing director of STR Global. The figures also show that the extent of the decrease in occupancy, ADR and RevPAR is less than earlier this year.