Newsletter
Tuesday, January 21, 2025

AP Hospitality Bulletin Asia Pacific - January 2025

by
Anchi LIU

New AP Article

Tourism in the Asia-Pacific region is thriving, but many destinations are grappling with the growing issue of overtourism. This phenomenon manifests in overcrowding during peak seasons and adverse effects on the environment and local communities. In our latest article, Overtourism in Asia-Pacific: Implications from Global Case Studies, we examine 15 destinations worldwide and across the region to understand how they are tackling overtourism. Our analysis aims to offer insights into future management strategies. Read the full article here.

Transactions That Matter

1. CPPIB China Integrated Development Portfolio 2025

  • The Canada Pension Plan Investment Board (CPP Investments) agreed to sell its 49% stake in four real estate joint venture projects with Longfor Group Holdings to an affiliate of Dajia Insurance Group. While the total sale price remains undisclosed, CPP Investments expects net proceeds of approximately C$235 million (US$163 million). The portfolio includes four mixed-use complexes located in Suzhou, Chongqing, Chengdu, and Shanghai. The collaboration between CPP Investments and Longfor dates back to 2014, but China's real estate market dynamics have shifted significantly over the past decade, resulting the divestment of the portfolio.
  • The projects in this portfolio are high-performing retail centres in prime locations. The Suzhou project, Paradise Walk, features the 276-key Hotel Indigo Suzhou Grand Canal. Opened in 2021 as part of the development’s second phase, the hotel is conveniently located near city centre attractions and office buildings.
  • The buyer, Dajia Insurance Group, was established in 2019 following the bankruptcy of Anbang Insurance Group. In recent years, Dajia has actively expanded its commercial real estate portfolio in China, completing at least five shopping centre acquisitions since 2023.

2. Four Points by Sheraton Seoul Station, Korea

  • KB Assets acquired the 342-key Four Points by Sheraton Seoul Station from Macquarie Asset Management for a reported US$136 million, equating to approximately US$398,300 per key. Opened in 2015, the property is directly connected to Seoul KTX Station and offers standard rooms starting at 23 square metres, an all-day dining restaurant, four event spaces, and a fitness centre.
  • As Korea’s tourism industry continues to recover, local news report that more hotel sales are on the horizon. Blue Cove Asset Management announced plans to sell the 307-key Parnas Hotel Jeju, originally acquired as Hyatt Regency Jeju and subsequently remodelled. Meanwhile, Mirae Asset Management is reportedly seeking a buyer for the 286-key Shilla Stay Dongtan, which operates under a 15-year lease with Hotel Shilla since 2015. Other prominent asset managers and owners, including DL Group, KT Group, and Lotte, are also considering divesting hotel assets in response to growing interest from foreign buyers.
Source: MSCI, AP Research

Deal Watch

  • Opened in August 2022, the 228-key Le Méridien Taichung is now up for sale via public tender. Owned and developed by Leefang Group, the total investment in the property exceeded TWD8 billion (approximately USD243 million), including the acquisition cost of TWD2.46 billion in 2013 and renovation expenses exceeding TWD3 billion.
  • The dual-branded Sheraton & Four Points Hotel in Tung Chung, Hong Kong, which comprises a total of 1,219 keys, is reportedly reducing its sale price to HKD4.5 billion (USD578 million), a 25% decrease from its initial asking price in 2023. According to data from the agent, the property is performing well with the return of tourists to Hong Kong. The Sheraton has recorded an occupancy rate of around 94%, with a daily rate exceeding HKD 1,400. Developed by Shimao Group and Mingfa Group, the property is back on the market as Shimao has faced another liquidation petition in Hong Kong. The development cost was reportedly HKD3 billion (USD386 million).

Tourism Overview in 2024 and Outlook in 2025

In 2024, tourism in Asia-Pacific was booming with the return of Chinese travellers, albeit at a moderating pace. Many countries in the region are expected to achieve full recovery in tourism by 2025, although some are still strategizing to boost visitor arrivals. The standout success is Japan, which has set a new record for visitor arrivals, surpassing 36 million in 2024.

  • Japan reopened its borders to international visitors in late 2022, quickly becoming a popular destination for travellers from around the world. Boosted by a favourable exchange rate, Japan is expected to attract even more international visitors in 2025, particularly with the World Expo taking place in Osaka from April to October. However, the country now faces the challenge of overtourism. To mitigate the impact, various cities and attractions have introduced initiatives, such as visitor caps for Mount Fuji and Ginzan Onsen, as well as a proposed increase in lodging taxes in Kyoto (for up to 10,000 yen [USD63] per night). Read more about overtourism in our latest article here.
  • Cambodia welcomed approximately 6.7 million foreign visitors in 2024, according to a spokesperson from the Ministry of Tourism. The top five feeder markets for Cambodia in 2024 were Thailand, Vietnam, China, Laos, and the United States. The government remains optimistic about future growth in the Chinese market. Arrivals in 2024 thus exceeded the peak performance seen in 2019, with the government targeting 7 million foreign visitors in 2025. To further attract tourists and investors, Cambodia has announced a reduction in visa fees, lowering the tourist visa fee from USD35 to USD30, and the regular visa fee from USD42 to USD35, alongside streamlining the visa application process starting this year.
  • Vietnam’s tourism rebounded strongly, with a total of 17.6 million foreign visitors in 2024, almost matching the 2019 figures. After streamlining the e-visa application process and launching various promotional events, Vietnam is optimistic about further growth, targeting 22 million foreign visitors in 2025, contributing 6% to GDP, or around $38.59 billion in revenue. The top feeder markets to Vietnam in 2024 were Korea (25%), China (21%), and Taiwan (7%). While the number of Chinese visitors doubled from 2023, it was still 2 million fewer than in 2019.
  • Malaysia has announced an ambitious plan to expand its tourism industry over the next two years, targeting 35.6 million international visitors and tourism receipts of RM147.1 billion (approximately USD33 billion) by 2026. Between January and November 2024, Malaysia welcomed 22.5 million international travellers, around 7% below the levels of 2019. During this period, Singapore remained the largest feeder market to Malaysia, followed by Indonesia and China. With the introduction of a visa-free policy for Chinese travellers in early 2024, Malaysia has seen an increase in Chinese visitors. Additionally, Malaysia has improved the connectivity of key destinations like Johor Bahru, Kota Kinabalu, Langkawi, and Penang to several international locations, aiming to diversify its tourism beyond the capital city.
  • Thailand received over 35.54 million foreign tourists in 2024, including 6.7 million from China. However, due to rumours of human trafficking, many Chinese travellers have opted for alternative destinations such as Japan and Singapore for safety reasons. Nevertheless, Thailand has set an ambitious target of 40 million foreign visitors in 2025, with a projected revenue of 3.4 trillion baht (around USD94.2 billion). The government plans to launch promotional campaigns, marking the 50th anniversary of diplomatic ties between China and Thailand. In addition to Chinese visitors, the government expects an increase in visitors from North Asia, particularly Japan and Korea, to offset the shortfall from China.

The chart below outlines the visitor arrivals to countries and regions in Asia Pacific.

Source: AP Hospitality Advisors
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