“I’ll give you the hard stats: 10 years ago, inter-Asia travel only made up four out of 10 arrivals. The other six were coming from long-haul markets,” Watts says. “Now, [inter-Asian travelers are] eight out of every 10 arrivals that walk through the door.”

Watts is bullish about Hilton’s prospects in Asia. In his interview with Fortune, the Hilton executive doubled down on an earlier prediction that the hotel conglomerate would have at least a thousand properties across the Asia-Pacific region by 2025. That target is “factual,” not “aspirational,” he says.

“We’ve got 700 hotels trading today, and another 800 under construction in various different parts of Asia,” he says. “We [will] cross the 1,000-hotel mark somewhere in 2025.” (Hilton hotels are a combination of Hilton-owned properties, Hilton-managed hotels on properties owned by third parties, and franchised hotels.)

Asia-Pacific economies were some of the last to open up after the COVID pandemic. Several Asian countries imposed controls on international arrivals, requiring lengthy quarantines if not barring entry entirely. The popular tourist destination of Japan only opened up to foreign tourists in October 2022; China, a major source of visitors, only got rid of its quarantine regime in January this year. 

The collapse of international travel was an existential crisis for many countries in Southeast Asia, which rely heavily on the tourism sector. The travel industry contributes about 12% to the GDP of Southeast Asian economies, according to the OECD.  

“The industry took such a hit over COVID,” Watts says. “In Asia, the industry has had decades’ worth of boom, so many of our team members had never seen a downturn.”

But with the end of COVID restrictions, both leisure and business tourism is starting to return. 

The region is still behind Hilton’s other major markets, but not by much. Last quarter, room occupancy at Hilton’s Asian hotels stood at 74%, just behind the U.S. and five percentage points behind Europe. Asian room occupancy also increased by 12 percentage points from the same period a year ago, which Watts attributes to Asian economies finally lifting their COVID restrictions from late 2022 onward. 

“One hundred million people every year join the consumer class [in Asia]. So to some extent, travel and tourism is just getting started, and the customer of tomorrow is a pan-Asian customer,” Watts says.

Short trips are fueling Asia’s travel boom. Watts explained that leisure travel in Asia tends to be short-haul: perhaps Bali three times a year, Hong Kong once over Chinese New Year, and the Maldives once a year. There’s also more business-leisure, or “bleisure,” travel, where business travelers may bring their families along for an extra weekend at their destination.

Younger Asian travelers are also seeking out “experiences” and are more open to exploring new places, he says. (That’s not always a good thing for tourist destinations: Hong Kong’s retail-heavy tourism sector is struggling as post-COVID tourists from mainland China are now more interested in social-media-friendly experiences, rather than the city’s shopping malls.)

A new destination: Vietnam

Hilton has earmarked Vietnam as a growth market. The company’s Asia president says the Southeast Asian country still has the allure of being “undiscovered,” compared with more established destinations like Thailand. Business travel may also pick up as more firms move operations like manufacturing to the country.

“Even a decade ago, people wouldn’t have thought of Phu Quoc, they wouldn’t have thought of Da Nang as destinations to put on their possible lists,” Watts says. “There were virtually no hotels” in the two Vietnamese beach resorts.

“Now every major brand in the world is in Phu Quoc, and the majority of them are also in Da Nang. If they’re not there today, they’re planning to build tomorrow,” he says.  

Vietnam attracted a record 18 million international arrivals in 2019, before the COVID pandemic. The government is now trying to get back to those numbers: The country has attracted over 11 million visitors this year so far, ahead of the government’s target of 8 million. Vietnam has made visa applications easier this year to help revive the tourism sector. 

A new source of tourists: India

If Vietnam is an up-and-coming destination, then India is an up-and-coming source of tourists.

India’s fast-growing economy, and its massive young population, are boosting the potential of the country’s outbound tourism market, the consulting firm McKinsey noted in a November report. The country has already recovered over 60% of its pre-pandemic levels of outbound travel. 

“India is a fantastic leisure market. And when it travels, it travels with generations,” Watts explains, with “parents, kids and grandchildren” all traveling together.

China looks inward

But one country still dominates Hilton’s regional forecasts: China. The country, before the COVID pandemic, was one of the largest sources of international visitors, supporting tourist economies in Southeast Asia and beyond. 

Eighty percent of Hilton’s business in China is domestic, in second-, third-, and fourth-tier cities, especially around the country’s business parks. The makeup of the domestic Chinese leisure market is changing, with what Watts calls a “transition towards experiences.”

Visa backlogs and a lack of flights are keeping Chinese travelers at home. And while that might be bad news for the foreign destinations that used to attract Chinese tourists, a shift to domestic travel isn’t necessarily bad for Hilton, which has over 500 hotels in the country and another 700 hotels in the pipeline.

Watts isn’t worried about China’s slowing economy. “I think retail concerns are what people are focused on,” he explains. “We’re just not seeing it in the travel and tourism space.”

The China Tourism Academy forecasts that the country’s domestic tourism market will hit 5.2 trillion yuan, or $724 billion, this year, or just over 90% of the 2019 total. The CTA, a government research institute, forecast that domestic travel would only recover to around 70% of 2019 levels earlier this year.

“If the Chinese leisure consumer is having reservations around travel, it’s certainly not in the short term,” Watts says.