Devonport Waterfront Hotel Sold for AUD40 Million in Australia

The Devonport Waterfront Hotel has been sold to Singapore-based Fragrance Group Limited (“Fragrance Group”), led by billionaire developer, Koh Wee Meng, for AUD40 million on a freehold basis. Developed by Australia-based property developer, Fairbrother Proprietary Limited (“Fairbrother”), the 187-key property is located on Tasmania's north-west coast. Construction started just last week and is slated to be completed by end 2021. The hotel is part of Devonport City Council’s Living City project, aimed at developing new retail, civic and hospitality venues to boost the local economy. In the proximity, Fairbrother is also developing an AUD25 million multi-purpose civic building. The Devonport acquisition expanded Fragrance Group’s Tasmanian hotel development portfolio to four properties. The group currently owns two hotel developments in Hobart, a 200-key hotel on Collins Street, another on Elizabeth Street and a third site on Davey Street, for which there are plans for an upmarket hotel.

Mandarin Orchard to Rebrand as Largest Hilton Hotel in Asia Pacific

Singapore-based property group, OUE Limited (“OUE”) and OUE Commercial REIT (“OUE C-REIT”) will spend SGD90 million to rebrand 1,077-key Mandarin Orchard Singapore as Hilton Singapore Orchard. The property will represent Hilton's flagship hotel in Singapore and its largest property in Asia Pacific. The property will feature 1,080 rooms, five restaurants and bars, new meeting facilities spanning 3,765 square metres including three ballrooms to meet growing demand for regional and global MICE (meetings, incentives, conferences and exhibitions) events. Refurbishment works is expected to commence in the second quarter of 2020, scheduled for completion by end 2021 and relaunch in 2022. Meanwhile, the property will continue to operate under the management of Meritus Hotels & Resorts, the hotel management company under OUE’s hospitality arm. OUE C-REIT expects a return on investment of an estimated 10% on a stabilised basis from its SGD90 million expenditure. The REIT manager intends to draw down on existing loan facilities to fund the exercise progressively over the renovation period.

Singapore Government Allocates SGD440 Million under Resilience Budget to Lift Tourism Sector

The Singapore government has announced that a total of SGD440 million (USD305 million) will be set aside to lift the tourism industry, as part of a larger SGD48 billion Resilience Budget to help mitigate the coronavirus pandemic’s impact on businesses and individuals. SGD350 million will be allocated under the Enhanced Aviation Support Package, which will provide rebates for airline parking and landing charges, as well as rental relief for cargo agents, ground handlers and airlines. The remaining SGD90 million will be parked to assist in the tourism sector’s rebound at a suitable time in the future. Hotels, serviced residences, restaurants, shops and attractions will receive full property tax waiver for the rest of 2020. In addition, the government will co-fund 75% of wages for firms in the aviation and tourism sector, 50% of wages for firms in the Food and Beverage sector, and other industries will receive 25% co-funding.

Hong Kong Tourism Board Prepares HKD400 Million to Support Tourism and MICE

The Hong Kong Tourism Board (“HKTB”) has announced a HKD400 million (USD51 million) trade support plan to stimulate tourism once the COVID-19 pandemic tapers off. The fund will aid a wide range of players in the industry with a plan to focus on three major areas, namely boosting domestic consumer confidence, collaborating with trade partners to increase promotions in source markets, and attracting MICE businesses. HKTB will offer subsidies to the retail and catering sectors for joint consumer promotion, waive the renewal fee for Quality Tourism Services (QTS) Scheme accredited merchants, and offer a 50% reduction in the application fee for new joiners. The participation fee of over 40 trade activities organised by HKTB will be waived, and travel-related activities will also be subsidised. In supporting MICE, the event organisers will be subsidised to bid for large scale conventions and exhibitions, the threshold for applying financing will be lowered to help small and medium-sized meetings and incentives, and the tourism board will team up with the hotel sector on a new initiative, MeetON@HongKong, to provide groups with free meeting or dining packages. The proposed marketing budget in the 2020/2021 financial year, together with the additional funding, is worth about HKD1,120 million (USD144 million).

China Sees Gradual Pickup in Domestic Travel

China’s travel market is embracing a gradual rebound as the epidemic has been controlled and improved for the better. Recently, some 20 provinces and municipalities including Shanghai, Jiangsu, Chongqing, Hainan and Zhejiang have lifted travel restrictions to faciliate the recovery of domestic tourism. Travel agencies, online travel platforms, scenic spots and hotels have begun to resume operation. According to Qunar, one of China’s biggest online travel service providers, visitors to scenic spots nationwide on 21 and 22 March surged by 91% over the previous week. According to data from Fliggy, a China-based leading travel service platform, during the period from 17 to 23 March, bookings of train tickets and scenic spots for the Tomb-Sweeping Day and the Labor Day holidays increased sharply by 100% week on week. A research report by travel agency, Tongcheng-Elong Holdings Limited, and airline data provider, Variflight Technology Company Limited, reveals that domestic bookings made during the week of 27 February to 5 March for April flights rose by 77% and for June flights jumped by 250%, as compared to the previous week. Driven by favourable factors, such as the coming holidays and efforts from Chinese authorities, the domestic travel market is expected to witness further recovery from the epidemic.

Absolute Share Price Performance, as on 27 March 2020