AP Hospitality Bulletin Asia Pacific - August 2024

Deals that matter.

• Hyatt further expands its lifestyle offering with the acquisition of Standard International, which is the parent company of The Standard and Bunkhouse Hotels brands. The acquisition price is reportedly to be up to US$335 million, including a base purchase price of US$150 million. The asset-light deal will bring 21 hotels with approximately 2,000 existing rooms and over 30 projects opening in the next 12 months. Standard's portfolio in Asia Pacific includes seven existing properties with 840 keys under three brands, including the newly opened Standard X in Melbourne and soon to open Standard Singapore. There are also several properties in Thailand in the pipeline, including two branded residence projects in Hua Hin and Phuket.

Transactions that matter.

1. Fortress Investment Group Japan Hotel Portfolio

• Invincible REIT (INV) acquired 12 hotels in Japan for JPY104 billion (USD927 million) or USD415,000 per key, from a group of sellers. The 12 hotels are all under the management of MyStays Hotel Group, which is also owned by Fortress, and located at strategic locations in major cities, including Osaka, Hokkaido, Tokyo, Kumamoto, Aomori, Shizuoka, Oita, Fukuoka, Miyazaki, Kagoshima, Shiga, and Nara. Eight out of the 12 hotels in the portfolio are full-service hotels. Considering the strong RevPAR performance of INV’s existing hotels amid the booming tourism sector and limited new supply in the pipeline, INV decides to continue acquiring high-quality hotels in Japan. After the acquisition, INV’s portfolio increased to 146 properties, including 104 hotels, and the share of full-service hotels would increase from 27% to 36%.
• Located in Osaka, the 454-key Art Hotel Osaka Bay Tower & Solaniwa Onsen has the largest acquisition price among the 12 hotels, which accounts for almost 30% of the total price and recorded USD 956,000 per key. Connected directly to the JR Station and certified as a Universal Studio (USJ) affiliate hotel, guests can enjoy a short ride to USJ and various attractions in the city. Additionally, the adjacent Solaniwa Onsen offers more than 3,000 square meters of Japanese onsen and recreation facilities, which hotel guests can enjoy at a discounted price.

2. Fraser Residence River Promenade, Singapore

• Tuan Sing Holdings completed the acquisition of the 72-key Fraser Residence River Promenade for S$140.9 million (US$104 million) or US$1.44 million per key. The property sits next to Fraser’s condominium development and is comprised of a four-story building housing the apartment units, three conservation warehouses, and 47 parking lots. The site was previously known as Zouk, a legendary nightclub, from the 1990s to 2016, and Frasers Property acquired the site for S$955.4 million in December 2017. The site now houses the 455-unit Riviere condominium and the 72-unit Fraser Residence, which recently opened in 2023.
• The acquisition is part of the strategy of Tuan Sing Holdings to further expand its hospitality business in the region, where it has two other hotels in Australia, including the Grand Hyatt Melbourne and the former Hyatt Regency Perth, which will soon become the Residence on Langley Park. Additionally, Tuan Sing’s new Opus Bay development in Batam will also include a hotel component.

News that Matters.

Cambodia

• Cambodia recorded a strong tourism recovery in June and welcomed 525,500 visitors, about 16.8% above the comparable figure in 2019. Leisure travellers remained the main purpose of visit, accounting for 77% of the total monthly visitors to Cambodia. In terms of source market, Thailand took over China as the largest feeder market, followed by Vietnam, China, Laos, and the US. Despite the strong growth of inbound travellers, travellers from China only reached one-thirds of the figure in 2019. While the number of visitors increased, most travellers entered the country via land borders, and entry via airports only accounted for one-thirds of the visitor arrivals. Both airports in Siem Reap and Sihanouk recorded limited international arrivals due to the slow resumption of flights from key cities in the region.
• Starting early this year, Cambodia expanded the border pass, which allows Thai citizens to travel to adjacent provinces of Cambodia across land borders without a passport, to one of its most known sightseeing spots, Siam Reap. The border pass would allow Cambodians to travel to Thailand without a passport and is expected to boost trade and tourism in areas near the border.

Japan

• Japan’s tourism continued to boom amid the relatively weaker yen. In June, the country welcomed over 3.1 million visitors, about 9% above the levels in 2019. Most feeder markets showed an increase from the pre-pandemic period, except China and several ASEAN markets.
• With more than 700,000 travellers, Korea is the largest feeder market to Japan due to the new flights between Incheon and various destinations, including Narita in Tokyo, Shimoji-jima in Okinawa, and Matsuyama in Ehime. Cruises also launched new routes from Korea to two ports in Japan, further boosting the number of Korean travellers to Japan. New flights from major cities in China, Taiwan, and Hong Kong were introduced to accommodate the increasing demand at the same time.
• However, overtourism became a serious issue for residents in the main tourism areas. To tackle overtourism, authorities across Japan have been exploring solutions. As the first city facing such challenges, Kyoto cancelled the bus day pass last summer, but it did not stop travellers flocking to anywhere in the city with multiple cases of misbehaviour. The mayor of Himeji City reportedly said that the city would consider increasing the foreign tourists’ entry fee to Himeji Castle, a designated national treasure, to up to four times the current price of 1,000 yen. The towns near Mount Fuji also tried to stop tourists from flocking to a popular Instagram spot with barriers, but it was taken town shortly as the behaviour of tourists “seemed to improve” and a typhoon approaching at the same time.

Tourism Recovery in Asia Pacific

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