AP Hospitality Bulletin Asia Pacific - April 2025

M&A Matters.

M&A activity continues

• In a parallel universe, two hotel chains recently announced their respective sales. One is CitizenM taken over by Marriott from GIC and APG and the other one Wanda Hotels & Resorts being acquired by Chinese OTA Tongcheng.Interestingly, both transactions have very similar pricing, US$355 vs US$347 million. The table below gives a comparison of the key metrics of the respective transactions.

• The Citizen M transaction does not include any real estate and the seller will continue to operate its properties under a long-term franchise agreement. APG is the largest shareholder of citizenM with GIC acquiring a 25 per cent stake in the business in 2019 at a value of $2.3 billion. CitizenM raised a further $1 billion in 2021 from Singaporean sovereign wealth fund GIC, Dutch pension fund APG Asset Management, and investment firm KKR Capital.

Transactions that Matter.

1. 21 Carpenter, Singapore

• Leo KoGua, a software billionaire and major Tesla shareholder, decided that his "mission is to make a meaningful contribution to society. As a new member of the community, I am committed to enhancing the welfare, culture, and heritage of Singapore."
• As a result, he paid US$74.5 million or US$1.55 million per key to acquire the leasehold interest in the 48-key shop house conversion hotel '21 carpenter'.
• The sale ranks among the highest on a per key basis in the city state. The broker did not disclose the cap rate.

2. Conrad Seoul, South Korea

• M&G Real Estate partnered up with the Conrad's owner Aravest by acquiring a 25.4% minority stake in the property. M&G is looking to deploy its value-add capabilities for the first time in a hotel. M&G says “This acquisition exemplifies our active management approach – identifying high-potential assets and enhancing them to drive long-term value." Reportedly, initiatives include a guest room reconfiguration and expansion of MICE space.

• In December 2024, Aravest (previously ESR), the private fund management arm under ARA Asset Management, was acquired by two Japanese firms SMFL MIRAI Partners Company and Kennedix for $270 million.

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News that Matter.

New York City, USA

While outside of our general purview, there are developments in NYC that show how far regulators can go. On 3 May 2025, the Safe Hotels Act targets human trafficking imposing obligations on staffing, safety, cleanliness, direct employment, and panic button obligations.Hotels are required to obtain (yet another) 2-year license to operate for a fee of US$350. Unionized hotels may be exempt should their collective bargaining agreements expressly incorporates the Act's requirements.

As a critical condition, hotels with more than 100 rooms must directly employ 'core employees', defined as those in housekeeping, front desk, or front service at a hotel, and provides several examples of core and non-core job classifications. This means owners must do away with contractors, subcontractors, and staffing agencies. A huge upheaval and complex undertaking some argue favors unionization. Certainly the bottom line of these hotels will be hit. Some industry participants have simply commented 'sell, sell, sell!'

Other requirements include:

• All core employees must be provided with human trafficking recognition training. A new core employee must be provided such training within 60 days of employment.
• Hotel operators must provide continuous front desk staffing by having at least one employee scheduled to provide front desk services.
• During overnight shifts, hotel operators may schedule a security guard rather than front desk staff to provide coverage, so long as the security guard is able to assist guests and has undergone human trafficking recognition training.
• Hotels with more than 400 guest rooms must have at least one security guard on schedule to provide continuous coverage to the hotel premises.
• Hotel operators must maintain cleanliness of guest rooms, sanitary facilities, and hotel common areas, including:
  • Providing every guest room with clean towels, sheets, and pillowcases prior to occupancy by a new guest;
  • Replacing towels, sheets, and pillowcases of an occupied guest room upon request by a guest; and
  • Cleaning an occupied guest room and removing trash daily, unless a guest affirmatively declines such cleaning and trash removal, without imposing a daily room cleaning fee or providing any discount or incentive to forgo daily room cleaning.
• Short-duration stays (bookings of less than four hours) are prohibited, except for hotels within one mile of either LaGuardia Airport or John F. Kennedy International Airport.

Some of these may appear obvious but certainly stripped down service levels have their day of reckoning. Interesting enough, the focus is on larger hotels of more than 100 and 400 rooms.

What's your take on this new regulation? Are you glad to be investing in Asia-Pacific?

Tourism Recovery in Asia Pacific

The chart below outlines the visitor arrivals to countries and regions in Asia Pacific for 2024 vs 2019.