IHCL to Acquire Controlling Stake in Brij Hotels; Strengthens Leadership in India’s Leisure Tourism
IHCL acquires 51% of Brij Hospitality for ₹undisclosed amount, adding 22 boutique properties to reach 610 total hotels.
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IHG Unveils Strategic Overhaul of its Upper-Midscale segment in Greater China’s Hotel Market
IHG Hotels & Resorts has recently announced a bold strategic overhaul of its four upper-midscale brands in Greater China — Atwell Suites, EVEN Hotels, Holiday Inn, and Holiday Inn Express. Focused on optimizing investment structures and ongoing brand refreshments, the upgraded strategy is designed to deliver high-efficiency, high-return solutions for hotel owners in this fast-evolving market.
APAC Hotels & Hospitality Market Update: Japan
Despite being one of the last markets to fully re-open its borders to visitors following the end of the COVID-19 pandemic, the large number of foreign visitors and durable domestic demand have seen Average Daily Rates (ADRs) across all cities and categories increase significantly. STR data show aggregate daily rates reached JPY 18,403 as of February 2024 y-t-d, 35% higher than the same period of 2019.
The return of the Chinese tourist?
This second part of EHL Institutional Visibility’s three-part series on China looks into the long-awaited return of Chinese tourists. It also addresses shifting trends in Chinese travel. We turn to Dr Yong Chen, Associate Professor of Economics at EHL Hospitality Business School, for insights.
By Andrew Brenner, Andrew Brenner, Translator and Editor, EHL
CapitaLand Ascott Trust divests three hotels in Japan for JPY10.7 billion
CapitaLand Ascott Trust (CLAS) is divesting three hotels in Osaka, Japan to an unrelated third party for a total of JPY10.7 billion (S$99.8 million[1]). The three properties are Hotel WBF Honmachi, Hotel WBF Kitasemba East and Hotel WBF Kitasemba West.
The Chinese Economy Today and the Specter of a Property Crisis
“The problem is serious.” And when it’s the head economist at the International Monetary Fund who says so, eyebrows are indeed raised. The comments made by Pierre-Olivier Gourinchas in early October at an IMF meeting in Morocco underscored the gravity of China’s current economic balancing act. The world’s second-biggest economy is staring down an unprecedented real estate crisis that could drag the country down with it.
By Andrew Brenner and Dr. Yong Chen
CapitaLand Ascott Trust divests two hotels in Australia for AUD109.0 million
CapitaLand Ascott Trust (CLAS) is divesting two mature hotels in Sydney, Australia to an unrelated third party for a total of AUD109.0 million (S$95.6 million[1]). Situated outside of the city centre, the two properties are Courtyard by Marriott Sydney-North Ryde and Novotel Sydney Paramatta.
The debt metric on real estate’s radar
As global volatility puts the debt exposures of real estate companies under sharp focus, lenders are paying greater attention to a metric that helps determine their ability to service loan facilities.
Accor continues to simplify its balance sheet by selling its residual stake in H World Group Limited (Huazhu)
Accor announces that it has completed the sale of its residual stake in H World Group Limited (formerly known as Huazhu Group Limited) for $460 million. This transaction finalizes the value creation of the investment initiated in 2016. The cumulative disposal value since 2019 has reached $1.2 billion, compared to an initial investment of less than $200 million. This contributes to the “asset-light” strategy of simplifying the Group's balance sheet. Following this transaction, Accor no longer holds any shares in the capital of H World Group Limited.
Understanding Hospitality REIT
The US government first established Real Estate Investment Trusts (REITs) in the 1960s, allowing retail investors access to the nation's vast portfolio of income-producing real estate assets. Since then, the REITs market has expanded significantly across many real estate asset classes, including hospitality. The first hospitality REIT (or lodging REIT) was introduced in the US in 1970, but this asset class didn't start to gain popularity until the mid-1990s when investors realized they could own and profit from lucrative hotel assets without having to spend a significant sum of money to acquire the asset.
By Anand Rai and Dipti Mohan
Return of travel bolsters Singapore
The easing of Covid travel restrictions has meant growth for Singapore’s hotel market, with investors also showing increasing interest.
HVS Monday Musings: Indian Hotel Industry Exploring the IPO Route
India’s initial public offerings (IPO) market has been thriving for the past few years, and 2021 ended up being a record year with over 60 IPOs, as the country’s stock market reached new highs, putting the COVID fears to rest. This positive trend has continued in 2022, with 19 companies launching their IPOs so far. However, hotel industry IPOs have been few and far between, with Lemon Tree Hotels and Chalet Hotels being the noteworthy ones, but even those were before the pandemic.
By Dipti Mohan and Mandeep Lamba
HVS Monday Musings: Income Capitalization Approach – The Gold Standard for Valuing Hotels
According to a recent GlobalData report, 573 deals (including mergers & acquisitions, private equity, and venture financing) were announced in the global travel and tourism (T&T) industry in the first half of 2022, reflecting a 3.1% increase over the same period last year. However, before these deals are concluded, the asset needs to be valued. So, how do we determine a hotel's market value and what exactly is valued under the category of hotels? The main valuation techniques are briefly covered in this article.
Hotel Transaction Activity in 2021
According to a recent GlobalData report, the global mergers and acquisitions (M&A) activity in the travel and tourism sector was worth US$155 billion in 2021, representing an 84% increase year-on-year, with the lodging segment accounting for the largest share in terms of deal value and volume. During the year, the sector saw 27 billion-dollar-plus global M&A deals, up from 20 the previous year. This, however, is a sharp contrast to the situation in India. Hotel transactions in the country have not increased significantly post-COVID, and the sector has not yet seen a flurry of distressed transactions, as was expected as a likely result of the pandemic.
By Dipti Mohan and Mandeep Lamba
India’s budget deficit to narrow down to 5.3% of GDP in FY22, forecasts GlobalData
The upcoming Union Budget of India (2022-23) is expected to focus on bringing in economic reforms to ease supply-side bottlenecks, provide production-linked incentive (PLI) schemes to domestic MSME’s* sector, asset monetization and privatization. Along with this, the government needs to strike a balance between fiscal expenditure and fiscal consolidation. Against this backdrop, GlobalData, a leading data and analytics company, expects the budget deficit to narrow down to 5.3% of GDP in 2022 compared to 5.6% in 2021.
HVS Monday Musings: Indian Hotel Sector’s Wish List for the Union Budget, 2022-23
COVID-19 and the ensuing travel restrictions have wreaked havoc on the travel and hospitality industries all over the world. To mitigate the impact, governments around the world have taken a variety of measures over the last two years, ranging from prioritizing vaccination for tourism employees to providing financial and liquidity support as well as making policy changes to aid the recovery of their respective travel and hospitality sectors. In fact, with low international travel demand, governments in some countries like Singapore, Hong Kong, Slovenia, Switzerland, and Thailand, have even introduced incentives and refunds to encourage citizens to travel within their own country.
By Dipti Mohan and Mandeep Lamba
HVS Monday Musings: Hotel Development Feels the Heat of Rising Input Costs
The Indian hotel sector is finally breathing a sigh of relief as demand has recovered dramatically in recent months, even helping push occupancy and average rates closer to pre-pandemic levels in a few markets. However, the hotel sector, like most others, is reeling under the pressures of rising prices, affecting not only operations but also hotel development plans in the country.
By Dipti Mohan and Mandeep Lamba
Tokyo 2020 Tourism Legacy Could Create Some Positive Impacts, Says GlobalData
Many will perceive Tokyo 2020’s tourism legacy to be overwhelmingly negative, due to it taking place during a pandemic and the side-effects that have come with that. However, some positives can still be drawn when looking to the future of Japanese tourism, says GlobalData, a leading data and analytics company.
Ascott Residence Trust Acquires Three Rental Housing Properties In Japan For JPY 6.78 Billion
Ascott Residence Trust (ART) has entered into agreements to acquire three freehold rental housing properties in central Sapporo for a total of JPY 6.78 billion (S$85.2 million[1]) to expand its rental housing portfolio in Japan. The three rental housing properties – City Court Kita 1 jo, Big Palace Minami 5 jo, and Alpha Square Kita 15 jo[2] – are from unrelated third parties. The average EBITDA yield of the three acquisitions is approximately 4%. The transactions are expected to complete by end June 2021. The acquisition of the three rental housing properties will be funded by debt and part of the net proceeds from recent divestments.
HVS Monday Musings: Indian Hotels Sector – Brand Signings In 2020
In the aftermath of the ongoing pandemic, brand signings by keys in India witnessed a year-on-year decline of 42% in 2020. Signings were especially low in the first half of the year, due to the uncertain market conditions and challenges related to closing deals on virtual platforms because of the COVID-19 lockdown and restrictions.
By Dipti Mohan and Mandeep Lamba