HVS - ASIA PACIFIC HOSPITALITY NEWSLETTER - For The Week Ending 14 November 2014 (November 21, 2014)

Chinese Hotel Group Acquires Louvre Hotel Group

Jin Jiang International Holdings Co. announced its acquisition of Louvre Hotel Group which has 1100 hotels in 47 countries. The purchase has since been rumored to be around US$1.49 billion. Jin Jiang intends on capitalizing on synergies to grow both brands globally. The transaction is expected to be completed in the first quarter of 2015. Global Chinese acquisition of hotel properties have been on the rise with Waldof-Astoria (New York) and South Park Hotel (Los Angeles) being two other properties sold recently.

Four Seasons 2016 Private Jet Itineraries

Four Seasons will offer four all inclusive itineraries in 2016 with prices starting at USD100, 000. A new itinerary for September to October will bring adventure seekers to Austin, Costa Rica, Hawaii, Sydney, Langkawi, Mauritius, Serengeti, Petra and Lisbon. The private jet will provide connections to many destinations that were previously not connected by direct flights. Tokyo, Beijing, Maldives, Bali, Chiang Mai and Mumbai will be some of the other APAC destinations the private jet will stopover in.

Singapore vs Macau Casinos

The slower economic growth, recent corruption crackdown and credit tightening in China, has reduced the number of Chinese VIP gamers. Gentings Singapore reported a 43 percent decline in net profit with gaming revenue declining by 21 percent. Similarly, MBS saw a decline of betting volume by 34 percent, resulting in a decline of 8.7% in gaming revenue. The world’s largest gaming centre, Macau, also saw one of the lowest records in gaming revenue this October since 2005, with revenue declining by 23.2 percent. In August this year, Singapore saw a decline of 28.2 percent in Chinese arrivals compared to the same time last year. With declining number of Chinese travellers, competition between casinos is expected to heat up.

Impact of Hong Kong Protests

Sun Hung Kai Properties Ltd reported that revenues for 16 of their properties are on an average 5% - 10% below expectations for September and October. While the impact of these protests is mild at present, bookings have declined in the subsequent months as compared to last year. On 17 November, a court order that the police carried out to clear out a small part of a pro-democracy protest site, met with no resistance from the protesters. Although, the long drawn protests have had an adverse impact on the tourism industry, this finally appears to be coming to a close.

Hotel REITS in India expected to pick up next year

Taking cue from the commercial real estate sector, the hotel industry in India is also evaluating prospects of entering the Real Estate Investment Trusts (REITs) business. Experts believe that the process might pick up from March 2015 onwards as a clearer picture is expected to emerge with the union budget in February and the Foreign Exchange Management Act (FEMA) approval for foreign investments expected shortly. Moreover, the Indian hospitality industry is poised for growth with the next ‘upcycle’ on its way, after a six-year down cycle since 2009-10. Achin Khanna, Managing Director - Consulting & Valuation for HVS South Asia said, growth will be driven by occupancies crossing the threshold limit of 60 per cent this fiscal year, as overall supply pressure dips. The stable government, improving economy and overall investor sentiment along with improved occupancies would drive the REITs story, he added.

Absolute Share Price Performance, as on 14 November 2014

Closing Share Price as at14 Nov 20147 Nov 2014% Change
Australia Stock Exchange (ASX)
Amalgamated Holdings Limited10.5710.243%
General Property Group4.204.171%
Mirvac Group1.771.77-
Mantra Group2.652.72-3%
Bangkok Stock Exchange (THB)
Central Plaza Hotel Public Co Ltd34.0035.00-3%
Dusit Thani Public Co Ltd62.0064.00-3%
The Erawan Group Public Co Ltd4.624.483%
Grande Asset Hotels and Property Public Co Ltd2.202.42-9%
Laguna Resorts & Hotel Public Co Ltd31.7532.00-1%
Minor International Public Co Ltd33.5032.254%
China Shanghai Stock Exchange (RMB)
Jinling Hotel Corporation Ltd12.0811.902%
China Shenzhen Stock Exchange (RMB)
Huatian Hotel Group Co Ltd5.806.10-5%
Guangzhou Dong Fang Hotel Co Ltd10.4710.88-4%
Huazhu Hotels Group Ltd25.4127.01-6%
Home Inns & Hotels Management Inc30.5830.44-
Hong Kong Stock Exchange (HK$)
Miramar Hotel & Investment Co Ltd9.809.82-
Regal Hotels International Holdings Ltd4.754.711%
Sino Hotels Holdings Ltd2.462.58-5%
The Hong Kong & Shanghai Hotels Ltd12.1211.981%
Shangri-La Asia Limited10.7610.74-
Dorsett Hospitality International1.471.387%
National Stock Exchange (INR)
IHCL (Taj Hotels, Resorts & Palaces)106.15107.05-1%
EIH (Oberoi Hotels & Resorts)103.85103.40-
Hotel Leela Ventures24.3521.6013%
Korea Exchange (KRW)
The Shilla92,90096,100-3%
Singapore Stock Exchange (S$)
Amara Holdings Ltd0.510.52-2%
Ascendas Hospitality Trust0.700.72-3%
Ascott Residence Trust1.261.251%
Banyan Tree Holdings Limited0.610.61-
CDL Hospitality Trusts1.721.673%
Far East Hospitality Trust0.810.83-2%
Hotel Grand Central Ltd1.291.30-1%
Hotel Properties Ltd4.094.051%
Mandarin Oriental International Ltd (US$)1.751.77-1%
OUE Hospitality Trust0.870.90-3%
Stamford Land Corporation Ltd0.550.55-
Taiwan Stock Exchange (NT$)
Formosa International Hotels Corporation319.00313.502%
The Ambassador Hotel, Ltd27.6027.60-
Tokyo Stock Exchange (JPY)
Japan Hotel REIT Investment Corp.71,70070,5002%
Imperial Hotel, Ltd2,3102,311-

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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