HVS Asia Pacific Hospitality Newsletter - Week Ending 20 December 2019
Dec 23, 2019
Australia-based Collective Hotel Management Private Limited has purchased the management rights to two major apartment complexes in Geelong's CBD, namely, the 60-Key Vue Apartments & Day Spa and the 127-Key Ritz Geelong, for nearly AUD10 million. Vue Apartments offers luxurious studio, one and two-bedroom options, targeting corporate short-stay and leisure visitors. All 60 rooms are in the letting pool and the property also operates the popular Vue Day Spa. Due for completion in late 2020, Ritz Geelong's purpose-built, short-term accommodation operation comes with long term caretaking and letting agreements and associated freehold real estate. The deal has boosted the company's portfolio, consisting of two luxury resorts in Noosa, and a corporate hotel in Woolloongabba. Moving forward, under half a billion dollars will be invested into Geelong and the Great Ocean Road region with the execution of the Geelong City Deal Implementation Plan. Presently, due to the undersupplied market, accommodations in the area achieved a high occupancy rate of approximately 77%. According to the latest figure from Tourism Greater Geelong and the Bellarine's 2018/19 annual report, visitation and visitor expenditure in the region have recorded double-digit growth. Singapore-based sovereign wealth fund, GIC Private Limited ("GIC"), and US-based private equity firm, KSL Capital Partners ("KSL"), has announced a partnership for a 35 to 40% stake in Soneva Holdings ('Soneva"). The two funds will infuse up to USD200 million in cash for Soneva's planned expansion in the next three years, with USD30 million of growth capital allocated towards refurbishment of existing assets and upgrading of facilities or services. Three new Soneva resorts, two in the Maldives and one in Okinawa, Japan, have been pre-approved. Of the three new Soneva projects, the first in the Maldives will be on an island in the north. It has been fully designed and is expected to finish construction by 2021. The other two projects will commence construction in 2021, with completion expected to be due in two years. As part of this new funding, a separate property company will be set up to develop the new properties. Soneva's founder, chairman and CEO of the group, Sonu Shivdasani, has pledged 50% of the shares of 55-key Soneva Fushi and 26-key Soneva Jani, for a 50% share in the new company, with the other 50% held by GIC and KSL. Civil Aviation Administration of China ("CAAC") has announced its approval for new flight routes operated by several foreign airlines to mainland China. Singapore Airlines has been approved to offer a seven-time-weekly service between Singapore and Hangzhou, which will be the carrier's fourth destination after Beijing, Shanghai and Guangzhou in mainland China. Germany-based Deutsche Lufthansa AG, operating as Lufthansa, will launch a new three-time-weekly route connecting Munich and Shenzhen, which will be the carrier's sixth destination in mainland China after Beijing, Shanghai, Nanjing, Qingdao and Shenyang. Egypt Air has been granted to run Cairo-Shenzhen flights twice a week, and its current destinations in mainland China include Beijing, Guangzhou and Hangzhou. In addition, the CAAC has approved South Korean low-cost airline, Eastar Jet's seven-time-weekly service between Seoul and Yantai City in Shandong Province; Russia-based Aeroflot's new five-time-weekly service between Krasnoyarsk and Beijing; and Russian charter carrier, iFly Airlines' new service between Vladivostok and Nanjing, as well as its new routes connecting Sochi in Russia and Kunming, Shijiazhuang, Jinan and Wuhan in mainland China. Hong Kong-based Great Century has reached an agreement with UK-based St Andrews Bay Development Limited to acquire Fairmont St Andrews, in Scotland, the UK, for an undisclosed sum. The deal represents the first investment of Great Century, a recently formed joint venture between Chan and Hong Kong-based conglomerate, Lai Sun Group. The 520-acre resort features 211 keys with two four-bedroom private manor homes, two championship golf courses, five dining outlets, ten-treatment room spa, a swimming pool, sauna, steam room, jacuzzi and relaxation room, as well as a 3,000-square-metre meeting and event space. The hotel will continue to be managed and operated by France-based Accor S.A. ("AccorHotels") with the long-term management agreement. Great Century is known as a global investments and asset management company with a core focus in golf and hospitality industries. According to a recent report released by Lodging Econometrics (LE), the total construction pipeline in China climbed to an all-time high with 3,380 projects and 628,972 rooms by the end of the third quarter of 2019. Currently, 2,548 projects under construction stand at 438,797 rooms across the country, while 404 projects with 85,026 rooms are scheduled to commence construction in the next 12 months and 428 projects with 105,149 rooms are in the early planning stage. In terms of construction pipeline by city, Chengdu stood at the top with 124 projects having 25,560 rooms, followed by Guangzhou, Shanghai, Wuhan and Suzhou. In the third quarter of 2019, China opened 658 new hotels with 92,932 rooms and is forecasted to open another 363 new hotels with 45,799 rooms by the end of this year. LE expects that new hotel openings will continue to ascend with a strong pipeline of 1,084 hotels with 157,893 rooms in 2020 and slow down to 773 hotels with 135,294 rooms in 2021. About HVS
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