In this week’s roundup of news from the Asia/Pacific region: China Lodging Group’s Q3 earnings call; Japan’s hoteliers preparing for growing demand; STR pipeline numbers; and more.
Hotel News Now each week features a news roundup from a different region of the world. Today’s review covers the Asia/Pacific region.
China Lodging closes 52 hotels, invests in new product
Executives for China Lodging Group said during their third-quarter earnings call they planned to use the cash generated from the closing of nine leased hotels and 43 manachised hotels to upgrade “its quality of service and product,” HNN’s Danielle Hess writes.
“That includes strengthening our own hotel portfolio,” CEO Jenny Zhang said on the call. “We are considering not only expanding our business in China; we are also considering overseas opportunities. … And secondly, we (will) also leverage out scale and the business know-how to create or support more new business.”
Japan’s major hotel markets see sustained demand growth
The number of international arrivals in Japan is expected to pass 28 million this year, writes Jesper Palmqvist, area director for the Asia Pacific region at STR, but projections put the number at 40 million by 2020 when Tokyo hosts the Summer Olympics. Hoteliers discussed what these visitors mean for Japan’s hotel industry during the PwC Japan Hotel Management Forum.
Japan is still catching up in terms of tourism management, Palmqvist writes, and human resources and a labor shortage are challenges facing the growing industry that will affect growing productivity as well as managing turnover. This means the industry will need to attract more people to work in hotels, he writes, which could result in hiring more foreign labor.
STR: Asia/Pacific hotel performance for October 2017
Data from STR, HNN’s parent company, shows hotels in the Asia/Pacific region reported positive year-over-year performance in the three key performance metrics during October 2017. Occupancy grew 0.7% to 71.7%, which combined with a 2.3% increase in average daily rate to $104.15 resulted in revenue per available room growth of 2.9% to $74.68.
Hong Kong reported a 1.3% increase in occupancy to 91.8%, a 2.6% increase in ADR to 1,395.12 Hong Kong dollars ($178.58) and 3.9% growth in RevPAR to HK$1,281.33 ($164.01).
Hotels in Indonesia saw occupancy grow 1.9% to 64.4%, but ADR dropped 1.3% to 980,023.75 Indonesian rupiah ($98.00), resulting in RevPAR growth of 0.6% to 630,662.71 rupiah ($63.07).
Hotels in the Philippines reported a 3.1% increase in occupancy to 67.4%, which paired with a 4.4% increase in ADR to 5,281.52 Philippine pesos ($106.16) led to RevPAR jumping 7.6% to 3,561.08 pesos ($71.58).
STR: Asia/Pacific hotel pipeline for October 2017
The October 2017 Pipeline Report by STR shows the Asia/Pacific region has 641,454 rooms in 2,917 hotels under contract, representing a 7.8% year-over-year increase. The region also reported 289,997 rooms in 1,245 projects in construction, a 15% year-over-year increase.
Shanghai, China, reported 9,877 rooms in 44 projects in construction; Jakarta, Indonesia, reported 5,932 rooms in 24 projects; Bali, Indonesia, reported 5,378 rooms in 28 projects; Chengdu, China, reported 4,538 rooms in 21 projects; and Beijing, China, reported 4,339 rooms in 17 projects.
Deals and developments
- Indonesia’s CT Corp and AccorHotels have come to an agreement to open 30 hotels representing 6,000 rooms in the country.
- InterContinental Hotels Group has signed a management agreement with Ratchada Honda Automobile Company for the 220-room Holiday Inn Express Bangkok Ratchada, set to open in 2020.
- IHG plans to extend its franchise model in China through its Crowne Plaza, Holiday Inn and Holiday Inn Resort brands.
- IHG has partnered with SAMHI to rebrand 14 hotels, representing about 2,000 rooms, within the company’s India portfolio to Holiday Inn Express brands.
- Bangkok real estate developer Sansiri Public announced it will invest $58 million to acquire a 35% stake in Standard International, an operator of five boutique hotels in the United States.
- Japan’s Hotel Okura and Hawaii-based Trinity Investments announced a joint venture to create a new upscale, select-service hotel brand called Nikko Style. Trinity Investments intends to raise as much as $300 million in equity to fund the chain.
Compiled by Bryan Wroten.