Hotel transactions value in India contracted by approximately 50% to reach INR24,611 million (approx. US$332 million) in 2020 compared to INR49,372 million (approx. US$690 million) in 2019, but was still higher than the previous peak of INR19,929 million achieved in 2015.Going into 2020, mergers & acquisitions (M&A) activity in the sector was expected to be stronger than that witnessed in 2019.
After making several representations to the government, the Indian hospitality sector, one of the worst-hit by the pandemic, was expecting some game-changing announcements during the Budget 2021 speech which would help accelerate the sector's recovery.However, the first ever 'digital' budget of the country failed to provide any direct and immediate support to the sector.
Snow Lake Capital Limited, a leading Asian alternative investment management firm with over US$3 billion in assets under management, today sent a letter to the MGM Resorts International (NYSE: MGM) ("MGM" or the "Company") Board of Directors urging them to sell 20% of their MGM China Holdings Limited (HKEX: 2282 HK) ("MGM China") business to a Chinese company as a strategic investor.
In the past few months, several state governments have been proactively lending a helping hand to the tourism & hospitality sector in their respective states, providing various relief measures to help the sector stay afloat during these trying times. Last month, in a move to reboot the sector, the Maharashtra government conferred 'industry' status to the state's hospitality sector.
All hotels strive to improve and reduce costs on an ongoing basis. During the normal course of operations, hotels try to achieve this by implementing various techniques, such as using alternate products, implementing process improvements, enhancing inventory management, and evaluating more efficient equipment, which allow them to save certain costs during the year. But the question here is whether these efficiencies are significant enough.
Asset-light operating models have become the main stay for growth of many of the major hotel companies in India, with Management Agreements being the preferred structure. The other major asset-light model - Franchising - though is yet to gain significant traction in the country. Approximately 14% of the total brand signings in 2019 were franchised properties as compared to 10% in 2018. On the other hand, Management Agreements accounted for 76% of the total brand signings in both 2019 and 2018. In contrast, hotel franchises are the most popular model in mature markets like the US, where almost 80% are franchised.
In a market like India, where land most often than not is mis-appropriately valued resulting in exaggerated project costs and hotel transactions are limited in number, the only viable methodology that remains relevant especially in the current uncertain & volatile market scenario is that of Discounted Cash Flows (DCF). Moreover, the current pandemic has had an unprecedented impact on the hospitality sector, with hotels being temporarily closed and the sector witnessing all-time low performance metrics, by the virtue of which, assessing the value of a hotel on current income fails miserably.
The National Bushfire Recovery Agency can not guarantee the funds set aside by the government to aid in the bushfire restoration will not also be used for the coronavirus response.
As a hotel consultant, I am often asked a pertinent question: Do hotels make profits in India? The challenges in building, operating, buying and selling hotels are a plenty. Investors frequently point to the relatively lower risk associated with other commercial asset classes such as office buildings, retail developments and warehouses. The highly dynamic and perishable nature of the hotel business pushes them to question the very veracity of it.
They vary in their method of funding, time span horizon, level of formality and freedom versus employer ties. Some address market gaps or seek to solve tangible problems, creating new revenue streams or bolstering existing ones with improved productivity or speed, while others test prototypes, incubate outlandish startups or provide an environment in which customers can become better acquainted with cutting-edge technologies.
A giant Singapore government-run fund has acquired a 25% stake in Dutch hotel company citizenM, providing a cash boost to the owner and operator of microhotels, as it ramps up a global expansion.
Emaar, the developer of the iconic Burj Khalifa and the upcoming Dubai Creek Tower, has commenced business development operations in China. This follows the announcement in July of the company's expansion to the country, coinciding with the coinciding with the historic visit of President Xi Jinping of China to the UAE.Emaar has a team of dedicated business development professionals in the country, specially recruited from China, and has started the design and fit-out of two premium offices in CBD of Beijing and Shanghai. In addition to promoting the UAE and Dubai as a high-growth investment destination, the two Emaar showrooms will showcase the flagship and ongoing premium lifestyle, shopping and hospitality developments in Dubai, like The Dubai Mall and Address Hotels as well as touristic destinations such as Burj Khalifa and Dubai Aquarium & Underwater Zoo.The diverse international educational opportunities such as New York University and Sorbonne University Abu Dhabi - a keen requirement by Chinese investors in property - as well as the healthcare amenities that are available close to Emaar's communities are highlighted at the state-of-the-art showrooms.Emaar aims to work with the UAE embassy in China to promote the nation's appeal to Chinese investors, with guidance from HE Ali Obaid Al Daheri, UAE Ambassador to China, who has been actively promoting UAE-China ties, by fostering trade relations and tourism, as well as highlighting the UAE's appeal as an investment hub.Emaar is also expanding its premium luxury hotel and serviced residences brand, Address Hotels + Resorts, to China. Address branded hotels will open in key cities in the country, building on the familiarity that the brand enjoys among Chinese tourists. Today, Emaar's hotels are among the most-preferred by Chinese visitors, given their central location and access to lifestyle destinations such as The Dubai Mall.Emaar's expansion to China complements the 'Belt and Road Initiative' announced by President Xi Jinping, in which the UAE will have a significant part to play. Chinese visitors can enjoy visa-on-arrival and have effortless connectivity with the city with Emirates operating to the key cities in China.
Several factors have forced numerous small and medium-sized hoteliers to put their properties on the block. Some industry observers are astonished to see so many hotel operators put their properties up...
Hotel chains and airlines have formed alliances, why not bedbanks? The first bedbank alliance by four Asian players may be the first of its kind, but what's more important is whether it can work. After all, if it looks so logical and easy, why didn't anyone do it sooner?
The hotel industry in Japan is evolving, with new lodging models emerging, some of which incorporate elements of the burgeoning sharing economy. A panel of real estate and hotel experts at the ULI Japan Fall Conference, held in Tokyo in November, discussed the capsule hotel and other models in Japan.
Japan's capital expenditure boom is shifting to the services sector, stirring fears that self-checkout systems and software will take the human touch out of omotenashi, the country's vaunted commitment to hospitality.
For long, hotel owners have been trying to find ways to safeguard their investments and interests during negotiation of management contracts with potential operators. And indeed, they have made notable headway. There was a time when a performance test clause featured sparingly in management contracts. Over the years, however, it became a standard provision in most agreements being signed in the west. Today, owners across the globe, including in Asia Pacific, insist on this requirement even as operators continue to wrap it with several riders. An equitable performance test clause protects the hotel owner from an incompetent operator, while at the same time assuring the management company that it will not be terminated for circumstances beyond its control.
RedDoorz, Southeast Asia's leading online budget hotel booking chain with a presence in Indonesia, Singapore and The Philippines, announces its successful fundraise of US$11 million. Headquartered in Singapore, the pre-Series B round comes as an additional investment from Asia Investment Fund of Sushquehanna International Group, International Finance Corporation (private investment arm of World Bank Group), InnoVen Capital, Jungle Ventures, who have invested in past rounds – along with new investors DeepSky Capital, FengHe Group and Hendale Capital and other investors.
rance’s Accor SA has bid A$1.18 billion ($920 million) for Mantra Group Ltd - a deal that would combine the two biggest hotel owners in Australia and seek to capitalize on surging tourism in the country.
Accor, already the biggest hotelier in Australia, offered A$3.96 a share, or a 23 percent premium to Mantra’s closing price on Friday. The total offer is worth A$4.02 per share if a six-cent final dividend paid in 2017 is included, Mantra said in a statement.
HOME Weekly Travel News CHINESE TOURISTS EXPECTED TO HELP EU ECONOMY CHINESE TOURISTS EXPECTED TO HELP EU ECONOMY Cecilia Garland - Oct 2, 2017 0 Asia & Pacific - China - Travel & Tourism Industry News Tourism statistic, travel statistic news CHINESE TOURISTS EXPECTED TO HELP EU ECONOMY Europe as a continent relies greatly on tourism. It is estimated that 10 percent of the economy of the EU accounts to this industry. EU leaders are now looking to improve the situation by bringing in more Chinese tourists to the continent. According to the President of the European Parliament, Antonio Tajani, the Asian market is set to be the driving force of European tourism in the coming years. The Italian politician also stated that tourism outflow and inflow will increase to 700 million by the year 2020. This would be a big increase, considering the fact that last year the figures reached 500 million.