HVS - ASIA PACIFIC HOSPITALITY NEWSLETTER - For The Week Ending 18 Mar 2016 (March 21, 2016)

Starwood Gets US$13 Billion Bid From Chinese Insurer Anbang; Tops Marriott Offer

A week after receiving a proposal from China’s Anbang Insurance Group, Starwood Hotels and Resorts Worldwide has informed Marriott International of its intention to terminate the current merger agreement unless revisions are made (and approved by Starwood’s Board of Directors) to surpass Anbang’s offer. In comparison to a merger with Marriott which gives a current value of US$71 per share to Starwood stockholders, the Anbang-led consortium acquisition proposal would allow a superior current value of US$86.67 per share. According to the terms of the current merger agreement, Marriott has the right to counter Anbang’s offer until March 28, 2016. Till then, Starwood is not allowed to enter into a binding proposal with the consortium. Additionally, Marriott has annouced that Starwood must pay a termination fee of US$400 million in cash, in order to accept the consortium’s proposal prior to the conclusion of Marriott’s negotiation period.

Strong Growth of Foreign Arrivals into Asia Pacific Expected till 2020

According to Pacific Asia Travel Association (PATA), Asia saw an average 4.5% growth in foreign arrivals as compared to the previous year, with Northeast Asia, Southeast Asia and South Asia at 3.5%, 6.7% and 8.2% growth respectively, in 2015. Much traveled destinations, such as Japan, saw over 47% growth in foreign arrivals due to easing of entry visa requirements. Emerging destinations, such as Sri Lanka, have also performed strongly having received almost 18% growth in foreign arrivals between 2014 and 2015. One of the drivers for such growth across the wider Asia Pacific region is the continued expansion of scheduled air seat capacity of airlines – 8.7% annual growth in 2015 for Asia Pacific as compared to a global average of 6.7%. PATA forecasts that foreign arrivals in the region will continue to grow at a steady average of 4.5% per annum till 2020, with origin markets in Asia generating the largest volume of arrivals into the Asia Pacific. The top Asian countries expected to achieve highest average annual growth rate of foreign arrivals between 2015 and 2020 are Sri Lanka, Laos, Bhutan and Thailand.

Lemon Tree Hotels Announces the Opening of Its First Resort in Delhi-NCR

Indian hotel company – Lemon Tree Hotels, inaugurated its first resort in Delhi-NCR at Tarudhan Valley, Manesar, earlier this month. Owned by Silverglades and following a renovation, the resort is now being managed by Carnation Hotels, the hotel management joint venture partner of Lemon Tree Hotels, under its Lemon Tree brand. Spread across 72 acres, the resort features 70 rooms including 18 studio apartments, a nine-hole golf course, a club house, a themed bar and restaurant, 8,600 ft2 of meetings and conferencing space, a spa and fitness center, an archery range, a billiards room, kids’ zone, games courts, and a swimming pool.

Akaryn Hotel Group to Launch a New Property in Vientiane

Akaryn Hotel Group has unveiled its plan for the first overseas property in Laos. Scheduled to open in June 2016, The President by Akaryn will be located in the heart of Vientiane. The hotel will consist of 30 rooms, two presidential suites and seven food and beverage venues. The property was originally built by the Chinese government as a gift to the Laotians two years ago, but the Lao government granted concession to a Lao mining company for the hotel’s continued construction. According to Anchalika Kijkanakorn, Founder and Managing Director of Akaryn, the mining company has signed a 10-year management agreement with Akaryn. The President by Akaryn will be the most luxurious hotel in in Laos, primarily targeting high-end markets in Laos and other Asian countries, including Thailand, as well as long-haul markets such as Europe and the US. The average room rate is expected to be US$500 while the presidential suite will be priced at a minimum of US$1,500, Anchalika added. Aside from Laos, Akaryn Hotel Group is also looking for opportunities in Myanmar, Cambodia and Vietnam. Another property of Akaryn to debut this year includes Arovada by Akaryn, a private retreat in Cambodia.

Park Hotels and Starwood Join Hands for Loyalty Benefit Program

Park Hotels in India, a part of Design Hotels, has joined forces with the Starwood Preferred Guest (SPG) loyalty program. Recently, Starwood named Design Hotels (a group of 290 independent hotels across the globe) as its 11th brand. The partnership will allow SPG members (currently over 21 million active members) to book and avail points at The Park Hotels across their five locations – Kolkata, New Delhi, Chennai, Hyderabad and Bengaluru, starting 23 March, 2016.

Chinese Theme Park Operators Eye Overseas Markets

In recent years, Chineses theme park operators, such as Huaqiang Infante, SongDynasty Town and Haichang Ocean Park, have been vying to expand their operations overseas. With the completion of the Isfahan Infante theme park in 2014 – the first Infante overseas project located in Isfahan, Iran – China became the second large-scale cultural theme park exporter in the world, after the United States. Songcheng’s 2015 annual financial report revealed its plans to venture overseas in 2016, while Haichang Ocean Park also announced its plans for overseas expansion. Chinese theme park operators are mainly looking at entering emerging countries by adopting an asset-light approach or through outsourcing their expertise in developing theme parks and entertainment facilities to other types of larger intergrated development. The challenge these operators face in expanding abroad is  the lack of brand influence beyond China. Additionally, most of the large-scale and high-tech entertainment equipment are currently being imported into China as compared to being manufactured within the country.

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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