HVS - ASIA PACIFIC HOSPITALITY NEWSLETTER - For The Week Ending 19 December 2014 (December 26, 2014)

In light of the upcoming festive season, HVS APAC will not be publishing a newsletter next week.
Here’s wishing you a happy holiday

$7.1bn Saipan Casino Complex

Imperial Pacific International Holdings Ltd has announced its plans to develop a US$7.1 billion, 4200 hotel room integrated resort in the Western Pacific Island of Saipan. The development will include a casino, housing 1600 gaming tables and 3500 slot machines. The first phase of development is slated to be launched in 2016 with the complete development expected be ready by 2020. Imperial Pacific, an investor in Hengseng Group, one of Macau’s largest junket operators, aims to capitalize on this promising market as Macau’s gaming revenues see a decline in the wake of a liquidity crunch and corruption crackdown in China. This development also comes amidst considerable criticism, questioning the financial feasibility of the project. Currently access to Saipan is limited to direct flights from Japan, Korea, Hong Kong, China and Guam, through air routes operated by Delta Airlines, Asiana Airlines, Shanghai Airlines, China Eastern and Fly Guam. Korea and Japan are key markets for Saipan’s tourism, having contributed a total of 284,000 visitors in 2013. Total visitations to the island are expected to reach approximately 470,000 in 2014.

Ho Chi Minh City – Extended Stay Segment

The serviced residences segment in Ho Chi Minh City (HCMC) is set to expand with the opening of 400 new apartment units. The extended stay sector within HCMC is driven primarily by foreign investments in retail and metro rail projects. Serviced apartments offer competitive pricing and convenience, and are preferred over independent housing by expats. The notable long stay products within the City Centre include Intercontinental Asiana Saigon Residences, Somerset HCMC, Somerset Chancellor Court and The Landmark, among others. The branded extended stay market in the CBD accounts for 1,500 apartments focused at serving the key expat community from Japan and Korea. This market has maintained an average occupancy of 85%, having recorded year-on-year increase in average rates for the past two years and estimated to achieve an ADR of USD 70 in 2014. This segment is price sensitive and ADR growth has been marginal. Proposed supply in the short to medium term includes the Le Meridien and Sedona Suites by Keppel Land, Singapore. Going forward, the long term investments from Korea and Japan in retail and construction are expected to continue driving demand into the long stay market.

Pattaya hit by Falling Ruble

Since January, the Russian Ruble experienced a weakening of 80% against the dollar. The weakening of the Ruble has had an adverse effect on a number of resort destinations in Southeast Asia. Pattaya, south of Bangkok, has experienced a particular decline with Russian visitor arrivals expected to drop by 50% by year end 2014. Room reservations from Russian tour operators and travelers have reportedly declined by 70% this current high season with some hotels operating at a meagre 30% occupancy. In view of the impact the weakened currency has had on Pattaya, other major destinations such as Bali and coastal destinations of Vietnam may also be negatively affected. This may be more so in the case of Nha Trang that initially held strong optimistic views of the segment and was expecting a surge in arrivals, at the beginning of this year.

India’s Vatika Hotels get a US$ 40 million equity boost from Goldman Sachs

Goldman Sachs has invested US$ 40 million as equity in India’s Vatika Hotels, a hospitality venture of Delhi-based real estate developer Vatika Group. The investment reportedly comes through an affiliate of the New York-based investment bank, although the exact stakes bought by the latter is yet to be disclosed. Most recently, Vatika group also raised close to US$ 24 million from Singapore's Sovereign Wealth Fund GIC to develop two residential projects on Dwarka Expressway. Vatika Hotels currently owns two operational hotels in the NCR under the ‘Westin’ brand, with a combined inventory of 425 rooms, while plans are underway for two new properties in Jaipur and Pondicherry. Besides its hotel ventures, Vatika Hotels owns and manages Vatika Business Centres as well as two restaurant brands, and envision major expansion in both these segments over the next three years.

HVS Releases Asia Pacific Hotel Watch 2015

The Consulting and Valuation team of HVS Asia Pacific recently published the Asia Pacific Hotel Watch (APHW) 2015. Providing comprehensive up-to-date hotel and tourism information such as tourist arrivals, hotel performance trends, as well as existing and future hotel supply information, this publication seeks to provide stakeholders with insights into various markets in Asia Pacific. APHW will provide insight into 44 markets within 15 countries across the region such as, Japan, Singapore, Philippines, Australia and Cambodia.

Absolute Share Price Performance, as on 19 December 2014

Closing Share Price as at19 Dec 201412 Dec 2014% Change
Australia Stock Exchange (ASX)
Amalgamated Holdings Limited10.6910.90-2%
General Property Group4.404.254%
Mirvac Group1.851.822%
Mantra Group2.752.702%
Bangkok Stock Exchange (THB)
Central Plaza Hotel Public Co Ltd33.2533.75-1%
Dusit Thani Public Co Ltd60.0060.00-
The Erawan Group Public Co Ltd4.824.82-
Grande Asset Hotels and Property Public Co Ltd2.021.992%
Laguna Resorts & Hotel Public Co Ltd29.5029.75-1%
Minor International Public Co Ltd35.0034.751%
China Shanghai Stock Exchange (RMB)
Jinling Hotel Corporation Ltd11.2511.69-4%
China Shenzhen Stock Exchange (RMB)
Huatian Hotel Group Co Ltd6.356.35-
Guangzhou Dong Fang Hotel Co Ltd13.0012.673%
China Lodging Group Ltd24.0023.044%
Home Inns & Hotels Management Inc30.3229.323%
Hong Kong Stock Exchange (HK$)
Miramar Hotel & Investment Co Ltd9.699.621%
Regal Hotels International Holdings Ltd4.884.90-
Sino Hotels Holdings Ltd2.422.42-
The Hong Kong & Shanghai Hotels Ltd11.7812.00-2%
Shangri-La Asia Limited10.6010.88-3%
Dorsett Hospitality International1.311.34-2%
National Stock Exchange (INR)
IHCL (Taj Hotels, Resorts & Palaces)116.10118.00-2%
EIH (Oberoi Hotels & Resorts)115.40113.252%
Hotel Leela Ventures21.2021.35-1%
Korea Exchange (KRW)
The Shilla88,20088,500-
Singapore Stock Exchange (S$)
Amara Holdings Ltd0.520.511%
Ascendas Hospitality Trust0.680.69-2%
Ascott Residence Trust1.261.27-1%
Banyan Tree Holdings Limited0.600.583%
CDL Hospitality Trusts1.731.75-1%
Far East Hospitality Trust0.810.82-2%
Hotel Grand Central Ltd1.291.30-1%
Hotel Properties Ltd4.104.11-
Mandarin Oriental International Ltd (US$)1.691.72-2%
OUE Hospitality Trust0.900.92-2%
Stamford Land Corporation Ltd0.540.54-
Taiwan Stock Exchange (NT$)
Formosa International Hotels Corporation314.50315.00-
The Ambassador Hotel, Ltd27.5527.401%
Tokyo Stock Exchange (JPY)
Japan Hotel REIT Investment Corp.82,40079,1004%
Imperial Hotel, Ltd2,3502,3082%

Disclaimer: Information provided above has been gathered from various market sources. HVS has not independently verified the accuracy of the information provided. Interested parties should not rely on the information as statement of facts and are advised to make their own independent checks to verify the information provided. For further information, please feel free to contact HVS Asia Pacific.

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