5 things to Know: 6 March 2015
06 MARCH 2015 10:17 AM
From the desks of the Hotel News Now editorial staff:
• Middle Eastern, Chinese investor interest grows in Europe
• Fosun purchases stake in Thomas Cook
• STR: US preliminary numbers show gains
• Lotte Group buys in Russia
• Qatar Airways getting into the hotel game
The time is right for Middle Eastern and Chinese investors to boost activity in the European hotel market, writes HNN’s Terence Baker. While Chinese outbound investment into the hotel environment has been making headlines for a while, speakers at this week’s International Hotel Investment Forum in Berlin reinforced the trend that outside investors are looking for good value, a great story and great assets in Europe.
The challenges right now: Finding clear, obvious buys; competition to place capital; and potentially shifting government policies.
Still, investor sentiment is good. “Cycles are different in Asia than in Europe and the United States, so it is the right idea to be in Europe at the moment. It is the way to go,” said Derek Cheung, CEO of Hong Kong real estate investment trust New Century Asset Management Limited. “Chinese companies are pushing the envelope and driving the price (in Europe) as funding is very cheap.”
Speaking of Chinese investment into travel: Fosun International purchased a 5% stake in United Kingdom tour operator and travel company Thomas Cook. The Financial Times reports Fosun paid £91.8 million ($138.3 million) for that stake. As part of the partnership, a statement from Thomas Cook said the two companies “will explore collaborative opportunities between Thomas Cook and other travel and leisure businesses in Fosun’s investment portfolio, including a closer cooperation with Club Med.”
Fosun recently purchased Club Mediterranee following a long-running bidding war for the all-inclusive global resort brand.
Fosun plans to acquire 30 of Thomas Cook’s 220 hotels under the new partnership. The two companies will work together to develop more hotel brands “tailored to the Chinese leisure market.”
STR (parent company of Hotel News Now) shared preliminary February 2015 data for U.S. hotel performance, showing total U.S. occupancy up 2% to 4% compared to February 2014. The midscale segment showed the largest year-over-year percentage increase, posting 3% to 5% gains for the month.
Total U.S. industry revenue per available room in February was up 7% to 9% compared to last year, with both the economy and midscale segments posting 8% to 10% year-over-year jumps.
Back to Asian investment, this time in Russia: The Korea-based Lotte Group (owners of Lotte Hotels & Resorts), is adding a second hotel in Russia to its portfolio, renovating the historic Yakuchikova’s mansion near St. Isaac’s Square, according to Incentive Travel & Corporate Meetings.
Overall, Russia saw occupancy in January go up 7.2% to 41.7% year over year, according to STR Global, sister company of HNN, though St. Petersburg posted the second-largest average-daily-rate decrease for the month, dropping 31.3% to €42.54 ($46.89).
Airlines are getting in on the game, too: Qatar Airways has purchased one hotel and is in negotiations to purchase several more (including three in North America), according to reports from ITB Berlin this week. Business Traveller reports Qatar Airlines purchased the Sheraton Skyline Hotel London Heathrow and will rebrand it as Oryx Sheraton Skyline London Heathrow.
Compiled by Stephanie Ricca.