Global hotel pulse: Asia/Pacific news
 
Global hotel pulse: Asia/Pacific news
11 DECEMBER 2019 8:36 AM

In this week’s roundup of news from the Asia/Pacific region: Australia’s room-count milestone; experiential travel boom in India; updates on Huazhu Group and Deutsche Hospitality; reports from HICAP; 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.

STR: Australia surpasses 300,000 hotel rooms
Australia now has more than 300,000 operating hotel rooms following openings in November, according to data from STR and AM:PM, the parent company and sister company, respectively, of HNN. Australia ranks 12th among countries globally in total room count and fourth in the Asia Pacific region.

“Australia has been on a progressive development path since 2016 with more than 26,000 rooms added to the marketplace,” said Matthew Burke, STR’s regional manager, Pacific. “That is not counting the more than 5,000 rooms that were closed during that period and converted for alternative commercial usage. This uptick in investment reflects the country’s strong performance, especially in major markets. As a whole, Australia’s occupancy has been at or near 75% for each of the last five years, and average daily rate has consistently ranged around 185 Australian dollars.”

Experiential travel set to boom in India
Catching up with other popular destinations, India is seeing increased interest from travelers seeking new experiences, HNN contributor Chitra Balasubramaniam writes. Hotels are offering guests a chance to do things such as go bungee jumping, swimming in a Himalayan lake and biking through parts of Kashmir.

“While experiential travel constitutes a very small portion of tourism in India, there has been a clear growth in this segment, which can only be expected to increase further. India has an extensive offering ranging from culture and heritage (to) spiritual and wellness tourism to adventure and eco-tourism. There are limited reliable figures on the growth in this segment as it is partly driven by the informal tourism sector,” said Jaideep Dang, managing director of hotels and hospitality at business advisory JLL.

STR: Asia/Pacific hotel performance for October 2019
Hotels in the Asia Pacific region reported negative year-over-year results for October 2019, according to data from STR. Occupancy dipped 0.9% to 71% while average daily rate fell 2.4% to $100.25, resulting in revenue per available room dropping 3.4% to $71.16.

Hotels in Phuket, Thailand, reported a 5.5% increase in occupancy to 65.6% matched with a 5.5% decrease in ADR to 2,813.53 Thai baht ($92.87), resulting in a 0.3% decrease in RevPAR to 1,846.25 ($60.94).

Hotels in Tokyo reported a 2.8% decrease in occupancy to 87.9% but a 19.5% jump in ADR to 23,663.64 Japanese yen ($217.93), resulting in RevPAR growing by 16.2% to 20,808.51 yen ($191.64).

Flexibility, alignment key terms for Asian conversions
Hotel renovations and conversions are avenues that smaller and new Asian hotel companies are using to move into new markets and segments, reports HNN’s Terence Baker from the Hotel Investment Conference Asia/Pacific.

Shin Hui Tan, executive director of owner-operator Park Hotel Group, said during the “Renovations and conversions” panel, her company recycles capital in ways that can add value to a property.

“We look at efficiencies with use of space and analyze how markets have changed,” Tan said. “On our (Grand Park Orchard) hotel, the goal was always how to unlock the value from this prime real estate. Also we wanted to unlock the retail value on the ground floor, improve the frontage, and Singapore boomed in that period, too.”

Strong fundamentals offset Asian development challenges
While the pace of new hotel development in Asia has increased, the incoming supply still falls behind the growing population and travel numbers, Baker reports from HICAP. Demand for hotels continues to grow, but the cost to build grows ever higher and sites to build on are becoming increasingly rare.

“Land prices for hotels in Singapore have surpassed that of residential, but if you do buy land, you can get the hotel up in eight months,” said Bobby Hiranandani, managing director of Royal Group, a Singapore-based hotel development and investment firm. “Nowhere else in the world can do that.”

Deutsche deal the ‘first step’ in Huazhu’s global plans
The acquisition of Deutsche Hospitality is a meaningful first step in Huazhu Group’s plans for international growth, company officials said during the company’s third-quarter earnings call, reports HNN’s Bryan Wroten. The deal will help Shanghai-based Huazhu gain a foothold in Europe, the Middle East and Africa.

“A global network has a natural synergy of channeling customers to their familiar brands and thus achieving an advantage in attracting customers all over the world,” said Executive Vice Chair-lady Jenny Zhang.

In an email interview with Hotel News Now, Deutsche Hospitality CEO Thomas Willms said Huazhu will open up new avenues and audiences for the Frankfurt-based company.

“The continued growth of Deutsche Hospitality requires an international distribution network and a strong global loyalty program and access to innovative technology,” he said. “These are the essentials that Huazhu brings to the partnership as well as a clear vision to strengthen the brands of Deutsche Hospitality in Europe, Asia and other parts of the world.”

Deals and developments

  • Singapore-based City Developments Limited Hospitality Trust announced it will acquire the 240-room W Singapore for 324 million Singapore dollars ($238.3 million).
  • KSL Capital Partners reached an agreement to take a significant minority stake in Thailand’s resort developer and operator Soneva.
  • Australian hotel owner Jerry Schwartz acquired the 360-room Paradise Resort Gold Coast in Surfers Paradise in Queensland, Australia, from Ralan Group for 43 million Australian dollars ($29.3 million).
  • Australia-based Moelis Australia is acquiring the real estate freehold and operating business of the 25-suite Beach Hotel in Byron Bay in New South Wales for more than AU$100 million ($68 million).
  • Thailand’s Central Group will invest more than 20 billion Thai baht ($663.1 million) to increase its presence in international destinations, including properties in Vienna, Osaka and Turin.
  • United Kingdom-based Merlin Entertainments will build and operate a Legoland Resort, including a 250-room theme hotel, in Shanghai with China Media Capital for £500 million ($625 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.