AP Hospitality Bulletin Asia Pacific - March 2023

Deals that Matter

Shanghai-based H World Group, formerly Huazhu, sold its remaining 3.7% stake in Accor for USD 318 million. Earlier this year, Accor also sold its remaining 3.3% stake in H World Group for USD 460 million. While neither company owns a stake in the other, both sides will continue the strategic partnership in China. Under the alliance deal signed in 2016, H World Group becomes the master franchisee for Ibis, Ibis Styles, Novotel, Grand Mercure, and Mercure in China, Mongolia and Taiwan. As of December 2022, the five Accor brands covered under the agreement have a total of 468 hotels open and 143 in the pipeline.

Transactions that Matter

1. Holiday Inn Melbourne on Flinders, Australia

• Pro-Invest Group announced its acquisition of the 209-key Holiday Inn Melbourne on Flinders for reportedly AUD 72 million (USD 48 million) or USD 230,000 per key. The buyer plans to spend AUD 20 million (USD 13.4 million) on repositioning and turning the property into a Hotel Indigo under a franchise agreement with IHG, set to open in mid-2023. The 103-key Larmont Hotel under Pro-Invest will also be repositioned as a Hotel Indigo, targeting younger travellers in the post-COVID tourism recovery.
• Located on the corner of Flinders Lane in the Free Tram Zone, the property is in proximity to Southern Cross Station and Melbourne CBD. Built in 1990, the property temporarily closed in December 2020 due to COVID-19, and later was operated as a quarantine facility before closing permanently.

2. The Waldorf Astoria Sydney, Australia

• Australia-based Fiveight acquired the development of 220-key The Waldorf Astoria Sydney from Lendlease and Mitsubishi Estate for AUD 575 million (USD 385 million) or USD 1.75 million per key. The buyer also acquires approximately 430sqm of ground floor retail space across the hotel and residential buildings.
• As part of the One Circular Quay project, the hotel is designed by Kengo Kuma & Associate, and it features views across Sydney Harbour, the Opera House and Sydney Harbour Bridge. Set to open in 2026, the property will come with F&B outlets, spa and wellness facilities, a pool, MICE facilities, and a rooftop bar.

News that Matter

Hong Kong SAR

• Fully reopening its border in January, Hong Kong further lifted the mask mandate after 945 days in early March. Hong Kong welcomed about 500,000 inbound visitors in January, 68% of which were overnight visitors. While the figure recorded strong month-on-month growth, it is only 7.4% of the pre-pandemic figure.
• To boost inbound tourism from short-haul markets, the Hong Kong Tourism Board launched the ‘Hello, Hong Kong’ campaign (prominently featuring Allan Zeman to give the city's nightlife an edge) and organized the giveaway of 500,000 free flight tickets to encourage traveling to Hong Kong. Additionally, inbound visitors are eligible to redeem vouchers at restaurants, retailers, and attractions.

Indonesia

• In 2022, Indonesia recorded a total of 5.47 million foreign visitors, exceeding the target of 1.8 to 3.6 million. The Ministry of Tourism aims to attract 7.4 million foreign visitors in 2023, approximately 45% of pre-pandemic levels. The Ministry launched two types of visas to facilitate the entry of foreign visitors, including visas on arrival for travellers and Second Home Visa for those intending to live in the country. Additionally, travellers from nine other member countries of ASEAN are eligible for the visa exemption.
• In January 2023, Indonesia recorded over 735,000 visitors, and 45% of them entered Indonesia via Bali’s Ngurah Rai International Airport. Chinese visitors are returning to Bali, focused on high spenders instead of the mass market. Regular flights from China have now resumed as well, including direct flights from Shenzhen and Xiamen, and connecting flights via Taipei.

Thailand

• Thailand sees a rebound in travellers after China removed travel restrictions, and among the 2.14 million foreign visitors to Thailand in January, 4% were from mainland China. The top three feeder markets were Malaysia (13%), Russia (9%) and South Korea (8%). In 2022, Thailand received 11.15 million foreign visitors, and it aims to attract 30 million foreign visitors this year.
• Thailand will start to impose an ‘entry fee’ for foreign visitors starting from June 1; for those arriving in Thailand by air will be charged 300 Thai Baht (USD 8.7) and 150 Thai Baht (USD 4.4) for others. According to local news agencies, the fee will contribute to the development and preservation of attractions and provide health and accident insurance coverage for tourists during their stay.

Tourism Recovery of Key Markets in Asia Pacific

Countries in Southeast Asia are leading the recovery in the region thanks to the removal of travel restrictions earlier than their peers. While mainland China reopened for outbound travel, it is still too early to see a great boost in Chinese visitors to most destinations. Notably, Macau and Hong Kong already showed substantial month-on-month growth because of the resumption of cross-border travel with mainland China.