HVS - ASIA PACIFIC HOSPITALITY NEWSLETTER - For The Week Ending 7 October 2016 (October 10, 2016)

Red Planet Receives Investment from Goldman Sachs; Aims to Speed Up Expansion Across Asia

Founded in 2010, Red Planet Hotels is a fast growing Pan-Asian budget hotel chain, currently owning and operating a portfolio of 26 hotels (4,118 rooms) in Japan, Thailand, the Philippines and Indonesia. The company recently made an announcement that they have received US$70 million investment from leading global investment bank, Goldman Sachs, which will facilitate the activation of a confirmed pipeline for 10 more hotels to open over the next two years. On the back of this fresh funding, Red Planet Hotels confidently targets to achieve its goal for an IPO in 2018. Since 2011, Red Planet Hotels has raised US$240 million in capital, and the funding from Goldman Sachs positions the company well to complete its next and final pre-IPO round of capital raising amounting to US$250 million. Simon Gerovich, Chairman of Red Planet Hotels, commented, “The investment we have received from Goldman Sachs will augment our expansion capabilities in the short term and allow us to focus on our longer-term goals of scaling up our hotel footprint across the Asia Pacific region.” 

Asia Pacific Records Highest Growth in International Tourist Arrivals in H1, 2016

According to the recently released UNTWO World Tourism Barometer, Asia Pacific saw a 9% increase in international tourist arrivals between January and June 2016 – the strongest growth worldwide, as compared to the Americas, Europe and Africa, which achieved 4%, 3% and 5% growth respectively. Asia Pacific also surpassed worldwide growth of 4% in the first six months of 2016, compared to the same period last year. Growth was primarily driven by strong intra-regional demand, with robust results in all four sub regions. Oceania led the growth at 10%, while arrivals in Northeast Asia and Southeast Asia increased by 9%, and in South Asia by 7%. In terms of outbound flows in H1 2016, top source market, China reported double-digit growth in expenditure on international travel (20%), benefiting destinations in the region and beyond. The US and Germany came in second and third, with expenditure on outbound travel increasing by 8% and 7% respectively.  

Keppel Land Divests Sedona Hotel Mandalay

Keppel Land has entered into a conditional sale and purchase agreement to divest its entire stake in Wiseland Investment (Myanmar) – which owns Sedona Hotel Mandalay – to Eden Hotels and Resorts for US$41 million. Opened in 1997, the 250-key Sedona Hotel Mandalay is located in the heart of the city, and faces the Royal Palace and Mandalay Hill. This divestment, which comes shortly after Keppel Land’s investment in Junction City Phase Two in Yangon, is in line with the company’s strategy to recycle capital for higher returns.

Chip Eng Seng and Park Hotel Group Jointly Invest in Maldives Resort

Last week, Chip Eng Seng Corporation announced that it will invest with Park Hotel Group in a Maldives resort project worth US$65 million. Under the terms of this joint venture, Chip Eng Seng will hold 70% while Park Hotel’s subsidiary, Grand Park Maldives, will take up the remaining 30%. Park Hotel Group will manage the 120 all-villa resort, Grand Park Kodhipparu, scheduled to open in the second quarter of 2017. Following the tie-up for Park Hotel Alexandra, which opened last year in Singapore, this is Park Hotel Group’s second partnership venture with Chip End Seng Corporation. 

Absolute Share Price Performance, as on 6 October 2016

Closing Share Price as at 6 Oct 2016 29 Sep 2016 % Change
Australia Stock Exchange (ASX)
Event Hospitality and Entertainment Ltd 14.89 15.14 -1.7%
General Property Group 4.9 4.96 -1.2%
Mirvac Group 2.18 2.18 0.0%
Mantra Group 3.22 3.27 -1.5%
Bangkok Stock Exchange (THB)
Central Plaza Hotel Public Co Ltd 39.5 39.75 -0.6%
Dusit Thani Public Co Ltd 10.4 10.30 1.0%
The Erawan Group Public Co Ltd 4.58 4.56 0.4%
Grande Asset Hotels and Property Public Co Ltd 0.82 0.81 1.2%
Laguna Resorts & Hotel Public Co Ltd 24.6 24.60 0.0%
Minor International Public Co Ltd 40.75 39.00 4.5%
China Shanghai Stock Exchange (RMB)
Jinling Hotel Corporation Ltd 13.12 13.12 0.0%
China Shenzhen Stock Exchange (RMB)
Huatian Hotel Group Co Ltd 6.85 6.85 0.0%
Guangzhou Dong Fang Hotel Co Ltd 17.58 17.58 0.0%
China Lodging Group Ltd 46.36 45.58 1.7%
Home Inns & Hotels Management Inc 35.71 35.71 0.0%
Hong Kong Stock Exchange (HK$)
Miramar Hotel & Investment Co Ltd 16.2 15.56 4.1%
Regal Hotels International Holdings Ltd 4.42 4.31 2.6%
Sino Hotels Holdings Ltd 2.45 2.45 0.0%
The Hong Kong & Shanghai Hotels Ltd 7.82 7.83 -0.1%
Shangri-La Asia Limited 8.68 8.60 0.9%
Dorsett Hospitality International 1.54 1.54 0.0%
National Stock Exchange (INR)
IHCL (Taj Hotels, Resorts & Palaces) 131.45 131.70 -0.2%
EIH (Oberoi Hotels & Resorts) 109.4 110.10 -0.6%
Hotel Leela Ventures 18.1 18.30 -1.1%
Korea Exchange (KRW)
The Shilla 59800 62000 -3.5%
Singapore Stock Exchange (S$)
Amara Holdings Ltd 0.405 0.405 0.0%
Ascendas Hospitality Trust 0.735 0.735 0.0%
Ascott Residence Trust 1.145 1.140 0.4%
Banyan Tree Holdings Limited 0.395 0.430 -8.1%
CDL Hospitality Trusts 1.385 1.390 -0.4%
Far East Hospitality Trust 0.610 0.600 1.7%
Frasers Hospitality Trust 0.705 0.690 2.2%
Hotel Grand Central Ltd 1.375 1.325 3.8%
Hotel Properties Ltd 3.470 3.510 -1.1%
Mandarin Oriental International Ltd (US$) 1.340 1.300 3.1%
OUE Hospitality Trust 0.685 0.675 1.5%
Stamford Land Corporation Ltd 0.475 0.470 1.1%
Taiwan Stock Exchange (NT$)
Formosa International Hotels Corporation 178 179.00 -0.6%
The Ambassador Hotel, Ltd 23.5 24.20 -2.9%
Tokyo Stock Exchange (JPY)
Japan Hotel REIT Investment Corp. 80600 79400 1.5%
Imperial Hotel, Ltd 2090 2113 -1.1%

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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