In this week’s roundup of news from the Asia/Pacific region: Global chains dominate Malaysia; hotel CEOs take longer view on industry troubles; 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.
Hotel CEOs take longer view on troubles facing industry
During the “The CEOs check in: A view from the top” session at the NYU International Hospitality Industry Investment Conference, hotel executives spoke about outbound Chinese travel and a key driver of global travel, reports HNN’s Robert McCune.
While the ongoing trade war between the U.S. and China isn’t good for business right now, hoteliers need to think about the role China will play “over a number of decades,” Hyatt Hotels Corporation President and CEO Mark Hoplamazian said. While Chinese outbound travel declined about 5.7% in 2018, that’s short-term and it’s not likely the backlash from the tariffs will have a lasting impact, he said.
Despite dip, global chains dominate Malaysia pipeline
Although Malaysia is dealing with poor transportation infrastructure and a sluggish economy, global hotel brand companies see the potential within the country and are moving ahead with their development projects, writes HNN contributor Tamara Thiessen.
Pipeline numbers from 30 April for Kuala Lumpur alone show 25 properties comprising approximately 6,665 rooms, according to data from STR, parent company of HNN. Nationwide, there are 114 hotels and about 29,233 guestrooms in the pipeline. All of these new hotels in the pipeline have some concerned about oversupply.
“Oversupply is likely to persist as demand is not keeping pace … especially in view of the recent fall in tourist arrivals,” said Neo Soon Hup, EVP of operations at Pan Pacific Hotels Group. “However, we are optimistic about the growth of the travel sector. Given Malaysia’s appeal as one of the top destinations within Asia, it will benefit from the boom in intra-regional travel,” he said.
CPH sells stake in Crown Resorts
Consolidated Press Holdings sold down part of its share in Crown Resorts Limited to diversify its investment portfolio, according to a news release. CPH will sell 19.99% of its investment in Crown to Melco Resorts and Entertainment for 13 Australian dollars ($8.93) a share, amounting to AU$1.76 billion ($1.2 billion).
Following the transaction, CPH will continue to hold about 26% of Crown and be represented on Crown’s board.
Huazhu Group closes 60 hotels in Q1
Continuing with its opening pace, Huazhu Hotel Group opened more than 200 hotels during Q1 2019, reports HNN’s Danielle Hess, but the company also closed 60 because of property-related issues, rezoning and lease expirations. However, the number of new hotel openings set a company record at 226 new properties.
“We had record-breaking hotel openings in the first quarter, with an average of 2.5 hotels gross or two hotels net opened every day,” said CEO Jenny Zhang. “We added net 166 hotels in Q1 2019, up from 71 hotels in Q1 last year, an increase of 130% year over year. And we expect future hotel expansion to continue to accelerate given a strong growing pipeline.”
STR: Asia/Pacific hotel performance for April 2019
Hotels in the Asia/Pacific region reported mostly negative year-over-year performance in April 2019, according to data from STR. Occupancy decreased by 2.2% to 71% while average daily rate increased by 0.2% to $102.69, resulting in revenue per available room dropping by 2% to $72.88.
Hotels in Beijing reported an occupancy decrease of 2% to 78.2% with an ADR increase of 1.1% to 653.45 Chinese yuan ($96.38). As a result, RevPAR declined by 0.9% to 510.98 yuan ($75.37).
Tokyo hotels reported an occupancy decrease of 1.1% to 91.8%, but ADR grew by 6% to 22,231.71 Japanese yen ($204.53), resulting in RevPAR growth of 4.8% to 20,415.85 yen ($187.83).
Deals and developments
- Melbourne-based Pentagon House acquired a Tasmanian hotel portfolio from Sydney-based EBC Hotel & Leisure fund for AU$35 million ($24 million).
- Four Seasons Hotels and Resorts plans to complete its multimillion-dollar renovation of the Four Seasons Hotel Sydney by the end of 2019.
- Singapore’s Naumi Hotels announced the acquisition of The Dairy Private Hotel in Queenstown, New Zealand.
- Australia’s Johnson Property Group will develop Trinity Point, a community and resort destination on Lake Macquire, New South Wales, Australia, that includes residential housing, a marina, a restaurant and bar and a 65-room Pullman Hotel.
- Pier One Sydney Harbour Hotel will complete its five-year transformation in September 2019.
- Thailand’s Dusit Thani has a 2.6-billion Thai baht ($83.2 million) expansion plan for its hotel and residential businesses that includes hotel renovations and new developments.
Compiled by Bryan Wroten.