HVS Asia Pacific Hospitality Newsletter - Week Ending 11 December 2020 (December 14, 2020)

HVS Monday Musings: COVID Cost Factor (CCF) - Are we willing to change the status quo in India?

By Ajay Mehtani
Most hotels have implemented quick cost-saving changes to their largest cost components i.e. compensation and energy costs as they try to stay afloat during the pandemic. However, the industry needs to take a step further by evaluating and scrutinizing their cost structures even deeper to make some radical changes. Are we ready & is it time?

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Padaeng Industry to Acquire Two Luxury Hotels in Bangkok

Thailand-based renewable energy firm, Padaeng Industry (“PDI”) has announced its plans to acquire a 51% stake in Urban Resort Hotel and Waterfront Hotel, which are the owning companies for the 299-key Four Seasons Bangkok at Chao Phraya River and 101-key Capella Hotel Bangkok, respectively, from Landmark Holdings, a subsidiary of Thailand-based Country Group Development. Mr Tommy Taechaubol, the managing director of PDI, stated that the total enterprise value of these two hotels is at THB10 billion. The hotels are situated on the last remaining waterfront plot along the Chao Phraya in Bangkok, spanning over 35 rai (5.6 hectares). The company is expected to finance half of this venture through its capital reserves and bank loans, and the other half from capital injections. This acquisition is part of PDI’s new strategic direction, which aims to diversify its portfolio by entering the hospitality and real estate industry. This investment follows PDI’s acquisition of a plot in Sathon to develop a 209-room luxury hotel valued at THB1.5 billion, which is slated to complete by 2023. The company expects that the revenues generated from these two hotels would surpass PDI’s existing business in renewable energy supply and plans to sell its non-core assets to finance acquisitions in the future. 

Sofitel Queenstown Sold to New Zealand Hotel Fund for NZD60 Million

Following the collaboration between Russell Group, Lockwood Group, and the New Zealand Superannuation Fund (“NZ Super Fund”) under the New Zealand Hotel Holdings Asset LP entity in 2019, the partnership has acquired Sofitel Queenstown Hotel and Spa, for an estimated NZD60 million. Situated within New Zealand’s top tourism destination site on a leasehold land in the heart of Queenstown, Managing Director of the Russell Group, Mr Brett Russell, highlighted that the 82-key Sofitel Queenstown is a strategic addition towards the NZD300 million hotel portfolio. Will Goodwin, NZ Super Fund’s Head of Direct Investments, further added that this acquisition is part of the fund’s strategic objective to increase assets in provincial tourism territories, such as Auckland, Queenstown, and Rotorua. France-based multinational hospitality company, Accor S.A., will continue to operate the hotel with all staff and operations remaining the same. Upon the expiration of the lease, there are plans to convert it into a five-star hotel. The acquisition will bring the current partnership portfolio to five including the Four Points by Sheraton and Adina Auckland Britomart located in Auckland, the BreakFree Hotel in Christchurch, and the Holiday Inn Hotel in Rotorua.

Cambodia Begins USD150 Million Road Projects to Modernise Siem Reap City and Tourism

The Cambodian Government will construct 38 roads in Siem Reap City in an effort to modernise the city and improve tourism experience. The project will connect the town, suburbs, tourist attractions and national road networks. When completed, it is expected to reduce traffic congestion, improve connectivity, and grow the transportation network, which will in turn attract investors and tourists. This USD150 million development is part of the Siem Reap Tourism Development Master Plan 2020-2035, which aims to urbanise and transform Siem Reap into a smart city while preserving the culture and architecture. Prime Minister of Cambodia, Mr Hun Sen, mentioned that Siem Reap is one of the three provinces, along with Phnom Penh and Sihanoukville, to be developed into main destinations for tourism, culture, history, and nature. Meanwhile, the government is also renovating about nine kilometres of Siem Reap River to enhance the city’s attractiveness.

Thailand to Launch Largest Train Station in Southeast Asia

Thailand’s Ministry of Foreign Affairs unveiled plans to launch Bang Sue Grand Station in 2021, which will be the largest train station in Southeast Asia. Occupying an area of approximately 518 hectares, this station could accommodate 26 to 40 trains simultaneously with a maximum capacity of 600,000 passengers daily. The station aims to alleviate Bangkok’s persistent traffic congestion and replace Hua Lamphong, as the capital’s railway hub. In addition to its intercity trains, Bang Sue will serve underground, commuter and high-speed trains that connect Suvarnabhumi, Don Mueang, and U-Tapao international airports. The Ministry mentioned that through these railway networks, the 220-kilometre route between Don Mueang and U-Tapao could take less than an hour. This station would also be a part of Thailand’s first high-speed train project, which runs between Bangkok and Nong Khai. The high-speed train project is expected to further extend through Laos and into Kunming, as part of China’s Belt and Road Initiative. The ministry believes that the construction of Bang Sue would be a catalyst for developing a new Central Business District around the station and improve connectivity within Thailand.

Absolute Share Price Performance, as on 11 December 2020

Closing Share Price as at 11 December 2020 4 December 2020 % Change
Australia Stock Exchange (ASX)
Elanor Investors Group 1.90 1.80 5.8%
Event Hospitality & Entertainment Ltd 9.39 10.90 -13.9%
General Property Group 4.65 4.67 -0.4%
Mirvac Group 2.68 2.65 1.1%
Bangkok Stock Exchange (THB)
Central Plaza Hotel Public Co Ltd 26.25 24.80 5.8%
Dusit Thani Public Co Ltd 7.75 7.80 -0.6%
The Erawan Group Public Co Ltd 3.72 3.60 3.3%
Grande Asset Hotels & Property Public Co Ltd 0.61 0.60 1.7%
Laguna Resorts & Hotel Public Co Ltd 28.25 27.50 2.7%
Minor International Public Co Ltd 28.00 26.25 6.7%
S Hotels and Resorts Public Company Limited 2.68 2.66 0.8%
China Shanghai Stock Exchange (RMB)
Jinling Hotel Corporation Ltd 8.11 8.35 -2.9%
China Shenzhen Stock Exchange (RMB)
Huatian Hotel Group Co.,Ltd. 2.66 2.84 -6.3%
Guangzhou Dong Fang Hotel Co Ltd 7.89 8.08 -2.4%
Huazhu Group Limited 47.02 51.20 -8.2%
Hong Kong Stock Exchange (HK$)
Miramar Hotel & Investment Co Ltd 12.90 12.96 -0.5%
Regal Hotels International Holdings Ltd 2.72 2.79 -2.5%
Sino Hotels Holdings Ltd 2.40 2.49 -3.6%
The Hong Kong & Shanghai Hotels Ltd 7.19 7.21 -0.3%
Shangri-La Asia Limited 7.33 7.40 -0.9%
National Stock Exchange (INR)
Chalet Hotels Ltd 192.65 167.60 14.9%
IHCL (Taj Hotels, Resorts & Palaces) 128.0 127.8 0.2%
EIH (Oberoi Hotels & Resorts) 100.2 99.1 1.2%
Hotel Leela Ventures 5.0 5.5 -8.3%
Lemon Tree Hotels Ltd 43.7 38.9 12.2%
Korea Exchange (KRW)
The Shilla 85000 82600 2.9%
Singapore Stock Exchange (S$)
Amara Holdings Ltd 0.36 0.36 0.0%
ARA Htrust (US$) 0.48 0.45 7.9%
Ascott Residence Trust 1.06 1.03 2.9%
Banyan Tree Holdings Limited 0.27 0.27 0.0%
CDL Hospitality Trusts 1.28 1.25 2.4%
Eagle Htrust 0.14 0.14 0.0%
Far East Hospitality Trust 0.62 0.64 -2.4%
Frasers Hospitality Trust 0.55 0.52 5.8%
Hotel Grand Central Ltd 1.00 0.99 1.0%
Hotel Properties Ltd 2.86 3.05 -6.2%
Mandarin Oriental International Ltd (US$) 1.92 1.87 2.7%
Stamford Land Corporation Ltd 0.31 0.32 -1.6%
Taiwan Stock Exchange (NT$)
Formosa International Hotels Corporation 139.0 140.5 -1.1%
The Ambassador Hotel, Ltd 30.0 30.1 -0.3%
Tokyo Stock Exchange (JPY)
Japan Hotel REIT Investment Corp. 53000 54500 -2.8%
Imperial Hotel, Ltd 1980 2002 -1.1%
Red Planet Japan Inc 61 62 -1.6%

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]
Steven Zhu, Vice President – HVS Shanghai [email protected]
Florian Kittler, Managing Director – HVS Executive Search Europe & Asia Pacific [email protected]

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