In this week’s roundup of news from the Asia/Pacific region: Kuala Lumpur outlook; a new hotel brand from Huazhu Group Limited; Australian hotel supply concerns; 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.
Kuala Lumpur hotel market looking for a revival
The Kuala Lumpur hotel market saw a 13.3% increase in supply since 2014 and 3.5% growth for full-year 2018, write STR’s Jesper Palmqvist and Jan Freitag. Demand, however, grew by 2.2% on average for the same time period and ended virtually flat (0.2%) by the end of 2018. STR is the parent company of HNN.
Over the past 10 years, tourist arrivals has remained almost flat. The market is becoming less dependent on arrivals from China, but both Malaysia and the Kuala Lumpur market are both seeing increases in the number of arrivals from Greater China. There is domestic and corporate business in the market, but when demand has increased occupancy levels, rates remained under pressure.
Huazhu CEO teases launch of new brand on earnings call
Huazhu Group Limited will launch a new upscale hotel brand called Madison in the near future, HNN’s Danielle Hess reports from the company’s fourth-quarter and full-year 2018 earnings call. Huazhu Group CEO Jenny Zhang did not provide much detail but did say the brand is expected “to accelerate our growth in the upscale segment.”
The company continues to grow its footprint, having 4,230 hotels in operation at the end of 2018. Its pipeline reached 1,105 hotels by the end of the year, which represents 26% of hotels in operation. Eighty percent of the rooms in the pipeline are in the midscale and upscale segments. Overall, the pipeline grew 19% year over year.
Brookfield buys India’s Leela business and four hotels
Canadian asset management firm and fund Brookfield has acquired India-based Hotel Leela Venture Limited’s Leela Palaces & Resorts’ management business and four of Leela’s nine assets, according to a news release. The assets are in Bangalore, Chennai, Delhi and Udaipur. The total transaction value is 39.5 billion Indian rupees ($572 million).
“The Leela is rated amongst the top hospitality brands in the world and I am confident that the brand will receive a boost and be further strengthened and continue to be known for its world-class services,” said Vivek Nair, chairman and managing director of HLVL, in the news release.
Centara aims to be top Thai chain, double size by 2022
Thailand’s Centara Hotels & Resorts has a goal to become “the leading international hotel group of Thai origin,” said Andrew Langston, Centara’s VP of business development. HNN’s Terence Baker writes this is no easy task as it competes against Minor Hotels, which owns Tivoli and NH Hotels.
“If we can embody the strengths of Thai hospitality and locally adapt them to each of our destinations, we shall differentiate ourselves and be successful,” Langston said.
Melbourne, Sydney lead Australia’s new hotel supply
Using data from STR, a January 2019 joint report from Tourism Research Australia and The Australian Trade & Investment Commission found nearly 8,000 new guestrooms will come in line this year, representing a 19% year-over-year increase, reports HNN contributor Tamara Thiessen. Approximately 11,500 rooms are expected to open in 2020.
“This will be a record year for Australia in new openings,” said Sydney-based Matthew Burke, STR’s regional manager, Pacific. “The previous peak was 7,093 rooms in 2016.”
The number of new room openings has created some concern about oversupply.
Deals and developments
• Accor and SBE will debut the Hyde hotel brand in Australia’s Gold Coast with the March 2019 opening of the Hyde Paradiso.
• Six Senses Hotels Resorts Spa debuted its flagship resort in Cambodia with the opening of the Six Senses Krabey Island.
• AXA Investment Managers – Real Assets acquired the 177-room Novotel Sydney Olympic Park, the 212-room Pullman at Sydney Olympic Park, the 150-room Ibis Sydney Olympic Park and the 286-room Novotel Canberra for 330.4 million Australian dollars ($236 million) from the Abu Dhabi Investment Authority.
• Vail Resorts entered into an agreement to acquire the ski fields at Fall Creek Alpine Resort and Hotham Alpine Resort in Victoria, Australia, for AU$174 million ($124.2 million).
• China’s Homeinns Hotel Group, owned by BTG Hotels Group, and affiliates of Hyatt Hotels Corporation have formed a joint venture to launch a new upper-midscale hotel brand in China.
Compiled by Bryan Wroten.