HVS - ASIA PACIFIC HOSPITALITY NEWSLETTER - For The Week Ending 21 November 2014 (November 28, 2014)

Investment Flows into Australia

Sheraton on the Park, in Sydney, was recently sold to a Chinese insurance company, Sunshine Insurer Group Ltd, for US$463 million, or just over US$830,000 per key. The 557-room hotel will continue to operate under the management of Sheraton Hotels and Resorts. This follows the recent rumours of the Hilton Sydney currently being on the market - another landmark hotel in Sydney’s skyline. Australia’s hospitality industry has been reported to have experienced the largest expansion in over 20 years. This transaction comes days after the announcement of China and Australia free trade agreement on 17 November. This agreement would not only provide a boost to various industries within the economy, but also see Australia grant visas for Chinese workers and holiday makers. As of 2013, China contributed 12% of visitors to Australia.

Aloft in Kathmandu

Starwood has revealed its plans to develop an Aloft property in Kathmandu by mid-2017. The 175-room mixed-use property owned by Chhaya Devi Complex Private Limited will feature 6,650m² of retail space. Aloft will be Starwood’s first property expected to open in Kathmandu with the other being a 225-room Sheraton due to open early 2018. In 2013, 51% of tourists visited Kathmandu for holiday, 12.8% for trekking & mountaineering, 9% for pilgrimage and only 3.5% for business. India (23.2%) and China (12.4%) are the main source markets for the destination. Other branded hotels within Kathmandu include Crowne Plaza, Radisson, Hyatt Regency and Shangri-la.

Japanese Recession

Despite the positive outlook earlier in the year, the Japanese economy has fallen into recession. Deflation, falling wages and rising sales taxes (+3% points as of April 2014) discouraged consumer expenditure bringing Japan into a recession. On an annualized basis, the world’s third largest economy saw a 1.6% decline in GDP as of September 2014 following a 7.3% decline the previous quarter. Japanese outbound travel has already seen a decline since 2012, due to the depreciation of the Yen, making travel abroad particularly costly for Japanese travellers. Regional destinations such as, Macau (-26.6%), Korea (-21.9%), China (-18.2%) and Hong Kong (-15.7%) were affected the most by the decrease in Japanese outbound visitors in 2013. Questions remain as to what impact this recession would have on travel in 2015, though for the domestic travel market in Japan, a decrease in outbound travel and increase in international travel due to currency exchange has so far been positive.

Wyndham Worldwide Introduces Timeshare into Southeast Asia

Wyndham Worldwide has announced plans to introduce its timeshare business into Southeast Asia possibly in 2015. Wyndham sees opportunities within Asia with keen interest in Indonesia, Thailand and Malaysia. Its Southeast Asian headquarter is planned to open in Singapore by the end of this year. Wyndham Vacation Ownership currently has 185 timeshare properties globally,with 26 in Australia, New Zealand and Fiji. Wyndham Vacation Ownership currently has 5 brands- Club Wyndham, WorldMark by Wyndham, Wyndham Vacation Resorts Asia Pacific, Shell Vacations Club and Margaritaville Vacation Club.

Absolute Share Price Performance, as on 21 November 2014

Closing Share Price as at21 Nov 201414 Nov 2014% Change
Australia Stock Exchange (ASX)
Amalgamated Holdings Limited11.0810.575%
General Property Group4.084.20-3%
Mirvac Group1.731.77-2%
Mantra Group2.752.654%
Bangkok Stock Exchange (THB)
Central Plaza Hotel Public Co Ltd35.7534.005%
Dusit Thani Public Co Ltd60.0062.00-3%
The Erawan Group Public Co Ltd4.784.623%
Grande Asset Hotels and Property Public Co Ltd2.262.203%
Laguna Resorts & Hotel Public Co Ltd30.7531.75-3%
Minor International Public Co Ltd33.7533.501%
China Shanghai Stock Exchange (RMB)
Jinling Hotel Corporation Ltd12.3312.082%
China Shenzhen Stock Exchange (RMB)
Huatian Hotel Group Co Ltd6.015.804%
Guangzhou Dong Fang Hotel Co Ltd11.5810.4711%
Huazhu Hotels Group Ltd24.4125.41-4%
Home Inns & Hotels Management Inc29.8630.58-2%
Hong Kong Stock Exchange (HK$)
Miramar Hotel & Investment Co Ltd9.639.80-2%
Regal Hotels International Holdings Ltd4.744.75-
Sino Hotels Holdings Ltd2.452.46-
The Hong Kong & Shanghai Hotels Ltd11.8012.12-3%
Shangri-La Asia Limited10.8610.761%
Dorsett Hospitality International1.471.47-
National Stock Exchange (INR)
IHCL (Taj Hotels, Resorts & Palaces)108.50106.152%
EIH (Oberoi Hotels & Resorts)109.00103.855%
Hotel Leela Ventures23.8024.35-2%
Korea Exchange (KRW)
The Shilla98,40092,9006%
Singapore Stock Exchange (S$)
Amara Holdings Ltd0.510.51-
Ascendas Hospitality Trust0.700.70-
Ascott Residence Trust1.261.26-
Banyan Tree Holdings Limited0.610.61-
CDL Hospitality Trusts1.701.72-1%
Far East Hospitality Trust0.890.8110%
Hotel Grand Central Ltd1.281.29-1%
Hotel Properties Ltd4.114.09-
Mandarin Oriental International Ltd (US$)1.751.75-
OUE Hospitality Trust0.890.872%
Stamford Land Corporation Ltd0.550.55-
Taiwan Stock Exchange (NT$)
Formosa International Hotels Corporation334.00319.005%
The Ambassador Hotel, Ltd27.3027.60-1%
Tokyo Stock Exchange (JPY)
Japan Hotel REIT Investment Corp.72,90071,7002%
Imperial Hotel, Ltd2,2622,310-2%

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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