AP COVID Hospitality Bulletin Asia Pacific - December 2022

Deals that Matter.

• Hyatt Corporation announced the acquisition of Dream Hotel Group in a move to expand its lifestyle hotel offering. The acquisition will add three brands, Dream Hotels, Unscripted Hotels, The Chatwa, and a portfolio of 12 managed or franchise hotels with 24 properties in the pipeline across Americas, Asia, and Europe. Upon the completion of the deal, Hyatt will pay a base fee of USD 125 million and a total of USD 175 million for hotels opening in the next six years. This move indicates the continuing asset-light strategy and ongoing expansion in key cities.
• InterContinental Hotels Group (IHG) and Spain-based Iberostar Hotels & Resorts entered a long-term commercial agreement for resorts and all-inclusive hotels. With resorts across the Americas, Africa and Europe, Iberostar is committed to responsible and sustainable tourism. Throughout the strategic alliance, Iberostar will retain 100% of ownership, and up to 70 hotels with 24,300 rooms will be added to IHG's system. Iberostar will become the 18th brand for IHG, and the IHG's global platform will grow 3%, broadening the global footprint of resorts.
• Singapore-based alternative asset manager, Indies Capital Partners, acquired a 60% stake in PT Swiss- Belhotel International Indonesia and PT Zest Hotels International Indonesia from Ciputra Group Indonesia for an undisclosed sum. Hong Kong-based Swiss-Belhotel International Holdings Limited will continue as the remaining 40% shareholder, and all hotels and projects will still be part of the Swiss-Belhotel International Group. This marks a follow-up to Indies Capital’s investment of Indonesia-based Artotel Group, showing their confidence in the hospitality industry in Indonesia.

Transactions that Matter.

1. Comfort Hotel Takamatsu, Japan

• The 163-key Comfort Hotel Takamatsu was sold to Hoshino Resort REIT at JPY 2 billion (USD 15 million) or JPY 12.6 million (or USD 91,810) per key. Opened in March 2022, the hotel is managed by Comfort Hotel under Choice Hotel International, and the occupancy rate has been recorded above 80% in the past three months.
• Located in the centre of Takamatsu in Kagawa, the property has great accessibility to the city centre and attractions in the area, such as islands in Seto Inland Sea. As a result, the property captures both leisure and business demand and maintains a strong performance despite the slow return of international visitors to Japan.

2. Larmont Hotel, Australia

• Pro-Invest Group announced the acquisition of the 103-key Larmont Hotel at Potts Point for AUD 46 million (USD 31 million) or AUD 446,600 (USD 303,540) per key. The price was discounted at more than 15% to the original asking price of AUD 55 million back in 2019. The property is operated by Lancemore group, whose owners Jan and Peter Clark owned a 10% stake. The buyer is likely to upgrade and reposition the property to attract new segments of visitors.
• The property was lastly traded as Diamant Hotel in 2014, when Singapore-listed developer TEE Land, Lancemore and Kenmooreland purchased the property and private apartments in the building at that time. Amcorp Global acquired its 55 per cent stake in the hotel after it took over TEE Land in 2020.

Deal Watch

• Built in 1990, the 546-key Kimberley Hotel is for sale at HKD 3.34 billion (USD 437.3 million) or HKD 6.2 million (USD 800,800) per key. This is the second time the seller, China Cinda Asset Management, put the property on the market, and the asking price was down from HKD 3.66 billion earlier this year. Taken over from the previous owner, the hotel changed hands for HKD 4.3 billion, excluding 20% stamp duty, in October 2019. The property is situated in the centre of Tsim Sha Tsui, with proximity to various attractions, shopping malls, offices, public transportation, and university.

News that Matter.

South Korea

• In October 2022, South Korea lifted all travel restrictions and the nation moved toward ‘pandemic living.’ While the number of daily cases remains high at over 50,000 in early December, international visitors are returning to Korea. The monthly number of visitor arrivals was recorded at 476,097, a 41% month-on-month growth and approximately 22% of the figure in the same month in 2019.
• Following up the virtual tour across Korea launched by Korea Tourism Organization (KTO) and Netflix, KTO launched a themed tour inspired by a Netflix show for foreign visitors in December. These tours extended the popularity of ‘Hallyu (Korean Wave)’ to cultural and historical tours. Additionally, Korea aims to win the bid as the host country of Expo 2030 in Busan, the country's second largest city situated on the southeast coast. The bid committee expects the event will draw over 30 million visitors and boost Korea’s national prestige.

Macau SAR

• While the quarantine remains for travellers outside mainland China, the number of visitor arrivals has bounced back to 580,000 in October after the lockdown in July this year. The gaming revenue, however, remained depressed since July. The monthly gross revenue recorded at MOP 3.9 billion in Oct, a 10.7% decrease from 2021.
• In late November, Macau announced that the existing six casino operators have been granted 10-year license renewals, indicating the failed attempt of GMM controlled by Malaysian tycoon and Genting chairperson Lim Kok Thay to secure a license of his own. At the same time, Macau is working hard to diversify its offering from gambling despite the lack of details regarding non-gaming development. The unlikely return of VIP gaming in a grand way has many repercussions for the SAR, especially on employment and tax revenues.

Recovery Status in Asia Pacific

As of December 2022, most countries and regions in Asia Pacific opened their borders and encouraged visitors to embrace the ‘new normal.’ Despite the different reopening timeline, most countries and regions are seeing strong growth of visitors on a month-on-month basis.

The top three countries leading the recovery in Asia Pacific are, Singapore, Indonesia, and Thailand. Additionally, Japan recorded the strongest month-on-month growth in October, the first month of normal travel since the pandemic, following by Korea and Taiwan, which also recently resumed normal travel to boost inbound tourism.

Hong Kong SAR government announced that the '0+3' monitoring period and contact tracing 'stay at home safe app' will be scrapped as of 14 December 2022. The sudden change reflects the wider national trend as China also stopped testing for COVID-19 and adopted the '0+3' scheme for visitors previously implemented in Hong Kong.

Below are the recovery of key markets in the region in October.