Global hotel pulse: Asia/Pacific news
 
Global hotel pulse: Asia/Pacific news
22 MAY 2019 7:15 AM

In this week’s roundup of news from the Asia/Pacific region: REITs in India; high-end hotels in China; APAC Q1 performance; and more.

Hotel News Now each week features a news roundup from a different region of the world. Today’s review covers the Asia/Pacific region.

REITs bring new funding option to Indian hotels
Real estate investment trusts are in their infancy in India, but this new ownership vehicle opens up opportunities for hoteliers in the country, writes HNN contributor Chitra Balasubramaniam. REITs debuted in India in March with Embassy Office Parks, a joint venture between India’s Embassy Group and U.S.-based Blackstone Group.

“Among the key things that any investor looks for or evaluates is the possible exit at the end of the investment horizon,” said Arvind Nandan, executive director of research at business advisory Knight Frank (India). “What has happened in the last several years is that a large amount of institutional capital has come into rent-earning commercial assets. This capital has to seek an exit in the next few years, and a REIT is one such option.”

High-end chain hotels booming in mainland China
In an analysis of China’s new supply of high-end hotels, STR’s Jesper Palmqvist and Christine Liu look at projected occupancy levels, the top markets attracting high-end investments and what brands are part of the new supply. STR is the parent company of HNN.

From 2007 to 2018, approximately 1,110 high-end chain hotels representing almost 330,000 guestrooms opened in major Chinese markets, the two write. The annual supply of new high-end hotels “remains robust,” as there are more than 28,000 new rooms on average opening each year for the past 12 years. Despite the new supply, occupancy of high-end hotels has grown each year since 2018.

IHCL and GIC put together £470m acquisition plan
Indian Hotels Company announced its strategic partnership with GIC, a Singapore-based sovereign wealth fund, for an investment platform with £470 million ($600 million) over a period of three years, according to a news release. They will use the platform to acquire hotels in the upscale, upper-upscale and luxury segments in India.

“We are delighted to partner with GIC, one of the most reputable global investors,” said Puneet Chhatwal, managing director and CEO of IHCL, in a news release. “This collaboration is in line with Aspiration 2022 and our vision to scale up, create greater enterprise value and make IHCL South Asia’s most iconic and profitable hospitality company. Through this Platform, we expect to acquire strategic and marquee assets that need new ownership, branding and positioning.”

STR: Asia/Pacific hotel construction up 23.3% in April
Pipeline data from STR for the Asia/Pacific region showed 1,892 hotel projects, representing 423,343 rooms, in construction as of April 2019. This is a 23.3% year-over-year increase in rooms in the final phase of the development pipeline.

A majority of the region’s rooms in construction were in the upscale (109,689 rooms, 12.3%), upper-midscale (99,013 rooms, 41.9%) and upper-upscale (95,915, 17.6%) segments. Five countries reported having more than 20,000 rooms under construction. China led with 225,170 rooms, representing 8.8% of the country’s current supply, followed by Japan, with 39,864 rooms, representing 6.1% of the country’s existing supply.

STR: Asia /Pacific hotel performance for Q1 2019
Data from STR shows hotels in the Asia/Pacific region reported negative year-over-year results during the first quarter of 2019. Occupancy declined by 1.3% to 67.4% and average daily rate slipped 0.9% to $103.63, resulting in revenue per available room falling 2.2% to $69.81.

Hotels in Bali, Indonesia, reported occupancy gained by 0.1% to 60.6% and ADR jumped by 14.3% to 1,439,349.34 Indonesian rupiah ($99.56), resulting in RevPAR growth of 14.4% to 871,828.26 rupiah ($60.30).

Hotels in Phuket, Thailand, reported an occupancy drop of 7% to 84.5%, which combined with a decrease in ADR by 5.7% to 5,098.74 Thai baht ($159.99), led to RevPAR falling by 12.3% to 4,310.34 baht ($135.25).

Deals and developments

  • Singapore’s Next Story Group acquired the 162-room hotel in Southbank, a neighborhood of Melbourne, Australia, for 45 million Australian dollars ($30.9 million) and will convert it to its new upper-midscale LinQ brand.
  • Thailand-based Centara Hotels & Resorts will debut in Myanmar with six new upscale and upper-upscale hotels in major cities.
  • InterContinental Hotels Group will open the 166-room InterContinental Hayman Island Resort in 1 July 2019 after an AU$100 million ($68.7 million) renovation.
  • A wholly owned subsidiary of Malaysia’s Hap Seng Consolidated Berhad entered into a management agreement with and an affiliate of Hyatt Hotels Corporation for the 220-room Hyatt Centric Kota Kinabalu, which is expected to open in 2021.
  • Myanmar-based Memories Group acquired a 15.3% stake in Strand Hotel International for 3.2 million Singapore dollars ($2.2 million).

Compiled by Bryan Wroten.

No Comments

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.