AP COVID Hospitality Bulletin Asia Pacific - November 2022
New article: Impact of COVID-19 on the Chinese Hotel Industry 2022 Edition.
Ealier this year, AP conducted a survey regarding the impact of COVID-19 on the Chinese Hotel Industry, and the summary of the finding are now available for download. In the article, different players, including operators, hotel managers, and developers, in the Chinese hotel industry voiced their opinions on the impact of COVID-19 and outlook for the coming year. The full article can be downloaded at the bottom of this page!
Transactions that matter.
Stamford Plaza Auckland, New Zealand
- Stamford Hotels & Resorts, which is owned by Singaporean tycoon CK Ow, announced another sale of its properties, the 286-key Stamford Plaza Auckland, New Zealand for NZD 170 million (USD 102 million) or approximately USD 356,600 per key. The property is taken over by a consortium comprising CP Group, New Zealand’s largest hotel owner, in association with Alvarium Investments and Archipelago Capital. Situated in the CBD of the capital, the 5-star property will be refurbished and rebranded under an international brand which is yet to be announced. The sale sets a record price for a single asset in New Zealand suggesting interests from international investors amid the post-pandemic recovery.
- The property is located at the heart of Auckland, within a short distance to the Ports of Auckland and financial hub. There are comprehensive facilities at the property, including meeting rooms and a ballroom catering for up to 320 guests, three F&B outlets, a fitness centre, and wellness offerings. This divestment is the second one announced by Stamford Hotels after the sale of the Sir Stamford at Circular Quay in Sydney, and the Group is reportedly looking for opportunities in other real estate classes.
The Wen Wan Resort, Taiwan
- Located at Sun Moon Lake, one of the popular leisure destinations in Taiwan, the 92-room Wen Wan Resort was taken over by Taiwan Life Insurance at TWD 780 million (USD 25 million) or TWD 8.4 million (USD 271,000) per key. Originally a BOT, “build-operate-transfer,” project initiated by the regional government, the acquisition of 99% of the stake of the property is pending the final approval of the authorities.
- Opened in 2010, the property was developed by Taiwan-based Tuck More Group and operated by Japan-based operator Okura. Since its opening, Wen Wan Resort has become the market leader in the area, together with The Lalu and Fleur de Chine by the lake. All of the guestrooms enjoy the panoramic view of the lake, and the entry category room measures 82-square-meter in size with private balcony and hot spring. The buyer is looking forward to bringing a new operator after the completion of the transaction, reportedly the Taiwanese Kuoyang Group, an experienced local operator.
Saipan World Resort, Northern Mariana Islands
- Korea-based Hanwha Hotels & Resorts has signed a 90 billion won (USD 67.5 million) deal with Practum Private Equity to sell the 259-key Saipan World Resort as part of its restructuring equating to a price of USD260,000 per key. Led by Practum PE, the joint investors include another local PE, Bailey Private Equity and local resort operator, Seolharone. After the takeover, the buyer plans to enhance the programs at the property, including the golf courses and water sports, to boost the occupancy to pre-pandemic level.
- Acquired from World Construct at 30 billion won in 2009, Hanwha attempted to divest the asset in 2019. However, the pandemic has slowed down the process. The resort is approximately a 9-minute drive away from the airport and has one of the largest water parks in Saipan. The reopening of its key markets, including Japan and Korea, is likely to pave the way towards the recovery of Saipan’s hotel and tourism industry, resulting in interests from overseas investors.
News that Matter.
- After easing almost all COVID-19 entry restrictions on October 11, Japan saw the return of overseas visitors and an increase in travel demand. According to the first figures released by Japan Tourism Agency, the daily number of visitor arrivals was about 13,000 to 14,000 after reopening. The Agency expects demand for air travel will return to the level of 2019 by 2025. In terms of spending, benefiting from the weak yen to major currencies, the government aims for annual tourist spending to reach 5 trillion yen (USD 34 billion) in the short term.
- Despite the failure of boosting visitor numbers through the Olympic Games last year, the government maintained its existing goal of an annual foreign visitor arrivals of 60 million by 2030, which doubles the figure from 2019. It's optimistic that the upcoming events, such as Expo 2025 in Osaka and the World Athletics Championships in Tokyo in 2025, are going to boost the visitor arrivals. At the same time, the Agency is also working toward reducing the pollution brought by tourists for sustainable growth.
- Lifting most travel restrictions, including pre-departure test results and indoor mask-wearing mandate, The Philippines is ready for a full reopening to tourists. The latest report by the Department of Tourism (DOT) indicated that 1.37 million travelers visited the Philippines in the first ten months of 2022, and the top five feeder markets are the U.S., South Korea, Australia, Canada and the U.K.. The largest market in 2019, China, only accounted for 1.4% due to the closed border. DOT efforts to identify the new travel trends and markets to complement the absence of Chinese travelers, such as shifting its focus to ASEAN markets.
- It is expected that the total number of foreign visitors will exceed 1.7 million by the end of the year, approximately 20% of the figure in 2019. To boost the number of visitors, DOT is set to launch travel packages showcasing the uniqueness of the Philippines, including luxury and family vacations, wellness retreats, diving and gastronomy. Another initiative by DOT, Philippine Experience Culture Heritage and Arts Caravan, will provide visitors chances to travel around the country for authentic local experiences.
- Sticking to its zero-COVID policy, China has further shortened the mandatory quarantine for all inbound visitors to 5+3 days and pre-departure PCR tests have been reduced to one time. At the same time, the Circuit Breaker measures for international flights are suspended. Although there is no timeline for a full reopening announced, it is speculated that China would further relax COVID related measures next year for business travel.
- The development of hospitality does not slow down in Hainan island amid the pandemic. In 2021, Hainan welcomed over 81 million visitors, including 127,300 visitors for medical tourism. Besides the exotic getaways and booming medical tourism, Hainan has also become a shopping paradise after the duty-free policy was first implemented in 2011. However, parts of Hainan were under a lockdown due to an increase in cases earlier in August, trapping tourists for a week or more, thus showing the current risks associated with domestic travel in China.
Reopening Status in Asia Pacific
- China and Macau SAR are the only two countries and regions that still impose mandatory quarantine on inbound visitors. Hong Kong SAR retains its '0+3' measures which prohibit visitors entering restaurants and bars (and other places were masks would be removed) in the first three days after their arrival along with multiple RAT and PCR tests over a nine day period.