HVS Asia Pacific Hospitality Newsletter - Week Ending 13 December 2019 (December 16, 2019)

Accor to Sell Half its Stake in Huazhu for USD451 Million

France-based hospitality group, Accor S.A. (“Accor”), has entered into an agreement to sell its approximate 5% stake in China-based hotel operator and franchisor, Huazhu Hotel Group Limited (“Huazhu”) for USD451 million. Accor will retain 5.8% stake in the Nasdaq-listed multi-brand Chinese hotel company, which last month, has entered into an agreement to acquire Frankfurt-based Deutsche Hospitality for approximately USD777 million to expand globally. Accor has released a statement that the decision was made to realize its investment in Huazhu, which has increased in value by 4.5 times since January 2016 when the deal was inked. In addition, Accor has also emphasized that the partnership with Huazhu will continue, with the chairman and CEO Sebastien Bazin remaining on the board of Huazhu. Huazhu continues to own 5% stake in Accor and a seat on the board. The partnership between Accor and Huazhu has enabled the openings of 200 economy and midscale hotels in China, mainly under the ibis, Novotel and Mercure brands. An additional 250 properties in the pipeline are scheduled to open over the next three years.

Giarn Family Acquires Hotel Cairns in Queensland, Australia for AUD11 Million

New Zealand-based Giarn family has acquired 92-key Hotel Cairns from a Chinese investor for AUD11 million. The property was last transacted at AUD8 million in 2014. Located in Far North Queensland, Australia, the 4,075-square-metre hotel features three street frontages and is situated in close proximity to the Cairns Esplanade, Cairns Aquarium, the new Cairns Performing Arts Centre, Munro Martin Parklands, Reef Hotel Casino and Reef Fleet Terminal. The transaction is the first Australian acquisition for the Giarn family, which operates multiple hotels in New Zealand. Subsequent to the acquisition, Hotel Cairns will join the US-based Wyndham Hotels & Resorts group to be rebranded as Ramada By Wyndham Cairns City Centre.

Myanma Tourism Bank to Start Tourism Fund to Promote Myanmar’s Tourism Sector

Myanmar-based Myanma Tourism Bank (“MTB”) has announced its intent to channel 5% of its earnings into a tourism fund to promote Myanmar’s tourism sector. The fund will go towards supporting Myanmar’s Ministry of Hotels and Tourism in marketing the country to drive tourism growth. Year-to-date September data has recorded more than 1.3 million foreign visitors in Myanmar, representing a 41% increase compared to the same period last year. The ministry attributed the increase to visitors from the Asian countries, such as Japan, South Korea and China. This is due to the government’s “Look-East policy” in its tourism campaign and the relaxed visa requirements since October last year. MTB was one of five sector-specific banks which were granted a banking license by the Central Bank of Myanmar in 2017. It was founded by a public tourism company during U Thein Sein’s government. MMK2 billion (approximately USD1.3 million) was raised to start the bank so that it can help boost the tourism sector.

More Direct Flights Between Vietnam and Thailand

Vietnam-based Vietnam Airlines, Malaysia-based Air Asia, and Thailand-based Bangkok Airways are launching new service routes, departing from secondary cities of Vietnam such as Nha Trang, Da Lat, Hai Phong, and Can Tho. Currently, there are total 301 flights per week between Thailand and Vietnam, an increase from 288 flights in the previous year. Vietnam-based Vietjet Air will also launch a daily service from Ho Chi Minh to Pattaya’s U-Tapao airport from 23 December 2019. According to the marketing base of Vietnamese tourists travelling abroad in 2018, approximately one million out of nine million people chose Thailand as their first tourist destination for two consecutive years since 2017. Tourism Authority of Thailand (“TAT”) believes that additional routes between Thailand and Vietnam will increase the number of first-time visitors from Vietnam.

India-based Vistara Signs Codeshare Agreement with Lufthansa

India-based full-service airline, Tata SIA Airlines Limited, operating as Vistara, has signed a codeshare agreement with Germany-based Deutsche Lufthansa AG, operating as Lufthansa, to further strengthen their existing interline partnership. The agreement will cover 18 Vistara-operated daily flights, starting from 16 December 2019, covering ten Indian cities, including Delhi, Mumbai and Chennai. Vistara is the second Indian airline, after Air India, to have a codeshare agreement with Lufthansa. Vistara, which began services in January 2015, now has codeshare agreements with six international airlines as it is looking at expanding its overseas network. It also has around 27 interline partnerships with various airlines.

Absolute Share Price Performance, as on 13 December 2019

Closing Share Price as at 13 December 2019 6 December 2019 % Change
Australia Stock Exchange (ASX)
Elanor Investors Group 2.14 2.13 0.5%
Event Hospitality & Entertainment Ltd 12.99 13.42 -3.2%
General Property Group 5.69 6.04 -5.8%
Mirvac Group 3.14 3.36 -6.5%
Bangkok Stock Exchange (THB)
Central Plaza Hotel Public Co Ltd 26.00 26.00 0.0%
Dusit Thani Public Co Ltd 9.80 9.80 0.0%
The Erawan Group Public Co Ltd 6.20 6.15 0.8%
Grande Asset Hotels & Property Public Co Ltd 0.75 0.76 -1.3%
Laguna Resorts & Hotel Public Co Ltd 41.00 42.75 -4.1%
Minor International Public Co Ltd 37.75 37.50 0.7%
China Shanghai Stock Exchange (RMB)
Jinling Hotel Corporation Ltd 9.01 8.88 1.5%
China Shenzhen Stock Exchange (RMB)
Huatian Hotel Group Co Ltd 2.57 2.62 -1.9%
Guangzhou Dong Fang Hotel Co Ltd 7.22 7.05 2.4%
Huazhu Group Limited 34.82 34.50 0.9%
Hong Kong Stock Exchange (HK$)
Miramar Hotel & Investment Co Ltd 15.20 15.04 1.1%
Regal Hotels International Holdings Ltd 4.15 4.05 2.5%
Sino Hotels Holdings Ltd 2.99 2.90 3.1%
The Hong Kong & Shanghai Hotels Ltd 8.85 8.83 0.2%
Shangri-La Asia Limited 8.40 8.22 2.2%
National Stock Exchange (INR)
Chalet Hotels Ltd 333.50 338.20 -1.4%
IHCL (Taj Hotels, Resorts & Palaces) 143.5 148.2 -3.1%
EIH (Oberoi Hotels & Resorts) 143.1 152.2 -6.0%
Hotel Leela Ventures 6.2 6.8 -9.6%
Lemon Tree Hotels Ltd 59.8 63.1 -5.3%
Korea Exchange (KRW)
The Shilla 85400 81300 5.0%
Singapore Stock Exchange (S$)
Amara Holdings Ltd 0.45 0.45 -1.1%
ARA HTrust (US$) 0.86 0.86 0.0%
Ascendas Hospitality Trust 1.09 1.12 -2.7%
Ascott Residence Trust 1.33 1.35 -1.5%
Banyan Tree Holdings Limited 0.40 0.40 0.0%
CDL Hospitality Trusts 1.60 1.62 -1.2%
Eagle HTrust (US$) 0.52 0.52 0.0%
Far East Hospitality Trust 0.72 0.74 -3.4%
Frasers Hospitality Trust 0.71 0.71 0.0%
Hotel Grand Central Ltd 1.31 1.30 0.8%
Hotel Properties Ltd 3.73 3.62 3.0%
Mandarin Oriental International Ltd (US$) 1.80 1.83 -1.6%
Stamford Land Corporation Ltd 0.50 0.50 0.0%
Taiwan Stock Exchange (NT$)
Formosa International Hotels Corporation 170.0 168.0 1.2%
The Ambassador Hotel, Ltd 32.2 30.2 6.6%
Tokyo Stock Exchange (JPY)
Japan Hotel REIT Investment Corp. 83600 87600 -4.6%
Imperial Hotel, Ltd 1968 1994 -1.3%
Red Planet Japan Inc 115 116 -0.9%

For the latest in the hospitality industry, please visit: http://www.hvs.com/. You are also welcome to contact the following personnel.
Hok Yean Chee, Regional President – HVS Asia Pacific [email protected]
Mandeep S. Lamba, President, South Asia – HVS Anarock [email protected]
Daniel J Voellm, Managing Partner – HVS Hong Kong [email protected]
Mei Leng Ho, Senior Vice President – HVS Singapore [email protected]
Paola Orneli Bock, Vice President – HVS Bangkok [email protected]
Steven Zhu, Vice President – HVS Shanghai [email protected]
Florian Kittler, Managing Director – HVS Executive Search Europe & Asia Pacific [email protected]

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