HVS Asia Pacific Hospitality Newsletter - Week Ending 26 March 2021 (March 29, 2021)

HVS Monday Musings: Indian Hotels Sector – Brand Signings in 2020

By Mandeep S Lamba and Dipti Mohan
This article discusses the key trends in hotel brand signings witnessed in the Indian hotels sector in 2020.

To view and download the full article, please click here.

NRMA Acquires RACT Hotels and Tourism Services for AUD160 Million

Australia-based National Roads and Motorist Association (“NRMA”) has announced its acquisition of several tourism businesses from the Australia-based Royal Automobile Club of Tasmania (“RACT”). The AUD160 million acquisition consists of two prominent hotels within Tasmania, the 60-key Freycinet Lodge and the 60-key Cradle Mountain Hotel, and tourism services including the Strahan Village and Gordon River Cruises. The assets will be paid by cash, with the company deploying part of its AUD1 billion funds that has been set aside for the acquisition of Australian tourism firms. The company stated that it plans to spend millions to improve these assets in the next two to three years. This move is part of NRMA’s plan to establish its new division, NRMA Expeditions. According to NRMA Expeditions CEO, Rachel Wiseman, the new division strives to deliver high quality experiences in natural environments. The sentiment is reciprocated by RACT Group Chief Executive Officer, Mark Mugnaioni, who agreed on revamping tourist experiences to meet consumer demands. Prior to this acquisition, the NRMA’s tourism investment portfolio was valued at AUD800 million and consists of a network of holiday parks across Australia, and a 46% minority stake in the Australia-based Great Barrier Reef cruise company, Coral Expeditions.

Pro-invest Group Launches Distressed Asset Fund to Capitalise Opportunities from Travel Recovery

Australia-based asset management and investment firm, Pro-invest Group (“Pro-invest”), has launched the Pro-invest Asia-Pacific Distressed Hospitality Fund (“Fund III”). Pro-invest aims to raise AUD500 million from institutional investors, sovereign wealth funds and family offices to invest in luxury, upper-upscale and upscale full-service hotels. In doing so, they hope to prop up the sector and provide operating capital as it rebuilds from the pandemic, especially after international borders reopen. The group believes that unprecedented market conditions created by the pandemic have created an opportunity to make value-added investments in these income-producing high-end assets. Outside of Australia and New Zealand assets, Fund III will seek Asian opportunities in Singapore, Japan, South Korea and Thailand. These higher-end assets experience higher revenue declines during market downturns, but will typically enjoy higher growth rates during market recoveries. Fund III will focus on acquiring hotels in markets with high barriers to entry and attractive supply-demand fundamentals. The group sees that there is the possibility to acquire assets below replacement cost, providing further upside for investors. Currently, Pro-invest is managing more than USD2 billion in real estate assets, including commercial assets as well as hotels operating under well-known brands like Holiday Inn Express, Hotel Indigo and voco.

Thai AirAsia to Restart All Domestic Routes

Malaysia-based low-cost carrier, AirAsia Berhad (“Airasia”), has announced plans to resume operations across all 40 domestic routes in Thailand from April, including the reinstatement of 14 regional routes from its hubs across the country. Beginning 1 April 2021, AirAsia will be increasing the frequency on popular routes, such as routes from Don Mueang Airport to Chiang Mai, Phuket, Hat Yai, Surat Thani; as well as the restoration of five routes from Suvarnabhumi Airport to Chiang Mai, Nan, Phuket, Hat Yai and Nakhon Si Tham. AirAsia Thailand CEO Santisuk Klongchaiya stated that the recent “#FlyRuaRuaPass” showcases the pent-up demand for air travel in Thailand and is very confident about the tourism industry revival in the country. This news follows the progressively planned reopening of several states in Thailand, where Koh Samui and Phuket has launched plans to allow inoculated foreign visitors to skip quarantine from 1 October 2021. The Thai government is expected to approve plans to recognise vaccine passport within the month and aims to reduce the mandatory quarantine periods for vaccinated tourists to seven days from the current 14 days.

Malaysia Announces MYR20 Billion Stimulus

Malaysia’s Prime Minister, Muhyiddin Yassin, has unveiled a MYR20 billion (USD4.8 million) economic stimulus package, People and Strategic Empowerment Programme (“Pemerkasa”). Pemerkasa is the sixth stimulus package announced in response to the pandemic. Targeted assistance to the tourism sector consists of an extension of tourism tax and service tax exemptions on hotel accommodation until the end of 2021, while tourism companies can also defer their monthly income tax instalments from 1 April to 31 December 2021. The state will also give a one-off special assistance grant of MYR3,000 to registered tourism businesses. Additionally, the scope of special relief on individual income tax of up to MYR1,000 will be expanded to include travel packages purchased from the tourism ministry. Furthermore, the special 10% discount on electricity bills for hotels and theme park operators, convention centres, shopping malls, local airline offices and travel and tour agencies, will be further extended till 30 June 2021. Meanwhile, Muhyiddin has also stated that the government will no longer impose a blanket Movement Control Order (“MCO”) and instead implement a more targeted containment strategy to reduce the negative economic impacts. The government has also increased the budget for the COVID-19 immunisation programme from MYR3 billion to MYR5 billion, with the target to achieve herd immunity by December 2021.

Absolute Share Price Performance, as on 26 March 2021

Closing Share Price as at 26 March 2021 19 March 2021 % Change
Australia Stock Exchange (ASX)
Elanor Investors Group 1.51 1.57 -3.8%
Event Hospitality & Entertainment Ltd 11.60 11.62 -0.2%
General Property Group 4.55 4.48 1.6%
Mirvac Group 2.43 2.42 0.4%
Bangkok Stock Exchange (THB)
Central Plaza Hotel Public Co Ltd 36.00 34.25 5.1%
Dusit Thani Public Co Ltd 8.30 8.20 1.2%
The Erawan Group Public Co Ltd 4.58 4.40 4.1%
Grande Asset Hotels & Property Public Co Ltd 0.63 0.61 3.3%
Laguna Resorts & Hotel Public Co Ltd 29.50 29.50 0.0%
Minor International Public Co Ltd 32.50 31.00 4.8%
S Hotels and Resorts Public Company Limited 3.22 3.32 -3.0%
China Shanghai Stock Exchange (RMB)
Jinling Hotel Corporation Ltd 7.89 7.89 0.0%
China Shenzhen Stock Exchange (RMB)
Huatian Hotel Group Co.,Ltd. 3.33 3.35 -0.6%
Guangzhou Dong Fang Hotel Co Ltd 8.06 8.31 -3.0%
Huazhu Group Limited 52.84 59.85 -11.7%
Hong Kong Stock Exchange (HK$)
Miramar Hotel & Investment Co Ltd 14.22 14.12 0.7%
Regal Hotels International Holdings Ltd 2.98 2.99 -0.3%
Sino Hotels Holdings Ltd 2.45 2.43 0.8%
The Hong Kong & Shanghai Hotels Ltd 7.83 7.99 -2.0%
Shangri-La Asia Limited 8.10 8.27 -2.1%
National Stock Exchange (INR)
Chalet Hotels Ltd 152.30 158.65 -4.0%
IHCL (Taj Hotels, Resorts & Palaces) 108.4 114.0 -4.9%
EIH (Oberoi Hotels & Resorts) 95.7 98.2 -2.5%
Hotel Leela Ventures 6.0 6.2 -3.2%
Lemon Tree Hotels Ltd 36.8 36.0 2.1%
Korea Exchange (KRW)
The Shilla 87200 87500 -0.3%
Singapore Stock Exchange (S$)
Amara Holdings Ltd 0.41 0.39 5.1%
ARA Htrust (US$) 0.54 0.54 0.0%
Ascott Residence Trust 1.08 1.08 0.0%
Banyan Tree Holdings Limited 0.39 0.32 21.9%
CDL Hospitality Trusts 1.25 1.25 0.0%
Eagle Htrust 0.14 0.14 0.0%
Far East Hospitality Trust 0.63 0.63 0.8%
Frasers Hospitality Trust 0.53 0.53 1.0%
Hotel Grand Central Ltd 1.08 1.05 2.9%
Hotel Properties Ltd 3.30 3.26 1.2%
Mandarin Oriental International Ltd (US$) 1.79 1.77 1.1%
Stamford Land Corporation Ltd 0.39 0.36 6.9%
Taiwan Stock Exchange (NT$)
Formosa International Hotels Corporation 157.0 160.5 -2.2%
The Ambassador Hotel, Ltd 29.2 29.3 -0.2%
Tokyo Stock Exchange (JPY)
Japan Hotel REIT Investment Corp. 63400 60800 4.3%
Imperial Hotel, Ltd 1996 2107 -5.3%
Red Planet Japan Inc 61 61 0.0%

For the latest in the hospitality industry, please visit: http://www.hvs.com/. You are also welcome to contact the following personnel.
Hok Yean Chee, Regional President – HVS Asia Pacific [email protected]
Mandeep S. Lamba, President, South Asia – HVS Anarock [email protected]
Mei Leng Ho, Senior Vice President – HVS Singapore [email protected]
Steven Zhu, Vice President – HVS Shanghai [email protected]
Florian Kittler, Managing Director – HVS Executive Search Europe & Asia Pacific [email protected]

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