A recap of the second day of the Hotel Investment Conference Asia Pacific from Hong Kong with takeaways, quotables, photos and more highlights from the event.
HONG KONG—Japan is the new star of the Asia/Pacific region, and not just because of the ongoing Rugby World Cup, according to discussions during the second day of the Hotel Investment Conference Asia Pacific.
Winnie Chiu, president and executive director of Dorsett Hospitality International, said Japan is firmly in her company’s sights.
“We have invested a lot there, 12 hotels, and the reason is that money is cheap and you can offset that capital on future earnings. It’s as though your construction is paid for. The market is 70% domestic, but the rugby will help,” Chiu said, who added her business model is focused on conversions.
Other panelists said the legacy stock in Japan is ripe for conversion as more international travelers discover the country.
The China-U.S. trade war and the protests in Hong Kong are still concerns, but hoteliers with a long-term hold are confident as travel demand continues to grow, capital is cheap and interest rates are negative in some markets.
The worry over geopolitics elicited a different opinion.
“Our biggest concern is crisis management,” said Allen Law, CEO of Park Hotel Group. “Hong Kong is trading half of what it should be doing, and there are many other uncertainties. How do we as an organization be resilient?”
On the same C-suite panel, Choe Peng Sum, CEO of Pan Pacific Hotels Group—who has been in that role only since July 2019—added, “The China-U.S. trade war (is) not a concern, but if you add all the geopolitical concerns—Brexit, Hong Kong—it is a troubling time.”
The cheap capital and favorable exchange rates throughout APAC have led to increased deployment of outbound capital, with Choe stating his firm is looking to acquire a portfolio in Europe.
There are economic concerns aplenty, but so far—with the exception of Hong Kong—the hurt has not materialized, and the major players continue to seek growth.
Quotes of the day
“All capital is looking at the third- and fourth-tier cities of China.”
—Fei Ye, VP of strategic investment, Huazhu Group
“Hotels absolutely are a bona fide asset class. I remember in the ’80s asking one insurance firm executive why he only had one hotel, not more, in his portfolio. He told me, ‘I have one hotel to remind me not to buy another.’”
—Tony Ryan, managing director, global mergers and acquisitions, hotels and hospitality group, JLL
Tweet of the day