AP Hospitality Bulletin Asia Pacific - February 2025

‍Transactions that matter.

Singaporean investors are making moves at the start of 2025

3 DL Group (GLAD) Properties, Korea

GIC beat Blackstone, KKR & and fellow Singapore-based SC Capital Partners to acquire three hotels in Korea from petrochemical-to-construction conglomerate DL Group (Daelim) for a consideration of approximately 600bnKorean Won (US$413 million). This translates to an average of US$370,000 per key for the 1,114-room portfolio. Two of the properties are located in Seoul (Yeouido and COEX) and one in Jeju City and all three are self-operated under the GLAD brand. The 282-roomCOEX property fetched a reported price of approximately US$580,000 per key,which can be considered as a very healthy price. DL Group is looking to exit its lodging holdings and has been selling off multiple assets over the past years to refocus on its core business.

2 GKK Properties,Japan

CapitaLand Ascott Trust (CLAS)keeps its focus on Japan with the acquisition of two limited-service properties for JPY21bn (US$178.5 million) from Chinese seller GKK. The 224-room ibis Styles Tokyo Ginza in the heart of the city and the 392-units Chisun Budget Kanazawa Ekimae. The combined yield is 4.3%.

FourPoints by Sheraton Nagoya Chubu Airport, Japan

Far East HTrust was another Singaporean firm active in Japan by acquiring the 319-room Four Points by Sheraton Nagoya Chubu Airport for JPY6bn (US$38.7 million) or US$121,000 per key. The move shows how international investors are looking for yield in markets outside the top 3 destinations for investors of Tokyo, Kyoto, and Osaka.The property is further attractive given excess land currently leased out to a car park operator. An earn out structure is in place, which could promise the seller an additional JPY1.75bn (US$11.7 million) based on property trading performance through 2028 translating to US$158,000 per key.

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Post-Pandemic Tourism Recovery.

Two years after the end of the pandemic, the tourism industry in the APAC region continues to struggle. Only three countries have managed to surpass their historic high in visitor arrivals attained in 2018 by2024. This is remarkable since in most other parts of the world tourism has registered major gains since. Maldives, Japan, and Cambodia present very different formulae in advancing their tourism sectors, yet evidently, they seem to succeed where no other market in the region can stand their ground. The total figure for visitor arrivals among the 17 markets reviewed trails pre-pandemic highs by 12.9%. Only Macau SAR, Malaysia, and Vietnam are quasi recovered with ratios above 90%. At the bottom of the table, Guam, CNMI, make for a sorry lot with recovery below 50% joined by Taiwan and Hong Kong SAR posting recovery below 70%. One major reason of course is the absence of the Chinese outbound market. Given the challenges in the domestic economy, outbound tourism collapsed – particularly in the value-oriented segment, further exacerbated by bans for zero-dollar tourism. The recovery in Chinese outbound tourism will unlikely come with a bang. Destinations are working to stimulate alternative source markets, for example India. However, geopolitics and specifically airspace restrictions due to the war in Ukraine continue to challenge the (European) long-haul market.

New Zealand

• New Zealand’s visitor arrivals were looking up in 2024,reaching 3.3 million – an increase of 12 percent over 2023. Visitor numbers from Australia are currently at about 88% of 2019 levels and remained the largest source of visitors, with 1.4 million arrivals, followed by the United States (370,000), China (248,000), the United Kingdom (180,000), and India(83,000). December 2024 saw 469,800 visitor arrivals, up 51,000 (12 per cent)from December 2023. It was the highest monthly total since December 2019, when528,200 visitors arrived before international travel was disrupted by theCOVID-19 pandemic. In December 2024, visitor numbers were 89 per cent of the level recorded in December 2019. The government is aiming to further boost tourism via a new marketing campaign – “Everyone must go!”

Laos

• In 2024, Laos welcomed more than 4million tourists, with an increase of almost one million visitors compared to2023. The top 10 countries contributing to this success with the highest number of visitors were Thailand, Vietnam, China, Korea, France, Russia, the United States, and the United Kingdom. Thailand led the way with 1.2 million tourists,followed by Vietnam and China both with just above 1 million. The rise in visitor numbers to Laos is attributed to the country’s increased exposure on several international travel websites as well as the success of the 2024 Visit Laos Year campaign. As part of this initiative, Laos granted special visa exemptions to more than 30 countries, including China, the United States, and eight European countries. However, visitor arrivals still trailed the record of4.79 million in 2019.Due to the later reopening of borders in Asia Pacific, the tourism recovery of key countries ranged from the low fifties to the high seventies, while monthly visitor arrivals to Japan already surpassed pre-pandemic figures for three consecutive months. Hong Kong, on the other hand, also reported a strong recovery in December compared to the levels of 2019. However, it’s still far behind its peak in 2018