Monday, January 15, 2024

AP Hospitality Bulletin Asia Pacific - January 2024

Anchi LIU

Transactions that matter.

1. Bulgari Hotel Shanghai, China

  • Jiangsu Jinfeng Cement Group under Jinfeng Group took over the 82-key Bulgari Hotel Shanghai from Overseas China Town (OCT) for RMB2.43 billion (US$340 million) or RMB 29.6 million (US$4.25 million) per key. Sitting on the northern bank of Suzhou Creek, the property enjoys views of the Bund and Lujiazui areas. Completed in 2018, the property recorded an average occupancy rate between 54% and 57% at an average daily rate between RMB5,900 and RMB8,100 during 2019 and H1 2023. However, the constantly unprofitable business worsened amidst the slow recovery of China’s inbound tourism. OCT would use the cash inflow for debt payments and future projects. Earlier in August 2023, Jinfeng Group also acquired the 471-key Sheraton Shanghai Hongkou Hotel for RMB1.64 billion, or RMB3.5 million per key. Ironically, as a producer of cement, the buyer is part of the real estate value chain and likely registers slower demand for its products reflecting the overall state of the real estate construction industry.
  • Wanda divested its 192-key Wanda Reign on the Bund to RGE Group, founded by Indonesian billionaire Sukanto Tanoto, at an estimated price of RMB 1.44 billion to RMB 1.7 billion (US$240 million). The price per key is up to RMB 8.85 million (US$1.23 million), significantly lower than the Bulgari hotel. Opened in 2016, Wanda is reported to have spent RMB3.4 billion on construction, a record high for construction cost in China. The property features five food and beverage outlets, 1,100 m2 of meeting space, an indoor pool, and recreational facilities. The property would remain under the management of Wanda after the deal.
  • A portfolio of three luxury hotels in China, including the 277-key Ritz-Carlton Tianjin, the 295-key InterContinental Sanya Haitang Bay Resort, and the 188-key Guanghegu Tianmu Hot Spring Holiday Hotel, was sold at RMB2 billion (USD280 million) or USD368,000 per key in a public auction. The sale price is RMB 950 million lower than its first listed price in August last year, while the information of the buyer remains unknown.

2. Guide Hotel – Zhong Yang, Hsinchu, Taiwan

  • Taiwan-listed Yea Shin International acquired a mixed-use building at the center of Hsinchu, known for the Hsinchu Science Park housing a number of semi-conductor factories, for TW$2.28 billion (US$73 million). The building was previously occupied by Forte Hotel Hsinchu, a business hotel which closed in May 2022 due to the pandemic, and is currently leased out to tenants as a fitness center on the ground floor, offices on the lower floors, and a 138-key hotel on the higher floors. The annual rent income is reported to be close to TW$36 million (US$1.2 million), and the lease would expire in 2027.
  • Yea Shin plans to redevelop the site as residential buildings with small to medium-sized units targeting young professionals working at the Science Park nearby after the lease expires. Aside from residential development, Yea Shin also invests in hotels, including the Four Points by Sheraton in Linkou, Taiwan, and the upcoming Sheraton Melaka Hotel.

3. Emerald Bay Resort, Cebu, The Philippines

  • Japan's Universal Entertainment, the operator behind Okada Manila Casino, agreed to acquire a majority stake in the Emerald Bay Resort in Cebu from PH Resort Holdings for an undisclosed sum. The Emerald Bay Resort is an integrated resort project that contains up to 1,050 hotel rooms, 18 food and beverage outlets, spacious MICE space, and a large-scale gaming floor. The project is expected to be completed by 2026, after several years of delay.
  • This is the third attempt by PH Resort Holdings to bring in investors to inject cash into the project. The previous deals with billionaire Enrique Razon’s Bloomberry Resorts and Cebu-based AppleOne Properties both fell through at the end. The deal is expected to be completed by July if both parties execute the definite agreements.
Source: AP Hospitality Advisors/ RCA

News that matters.


  • Japan recorded over 2.4 million inbound travelers in November last year, the second consecutive month that was above the level of 2019. Korea, Taiwan, and China are the top feeder markets, while the number of visitors from China had only recovered to 34% of pre-pandemic levels. At the same time, the number of visitors from Korea tripled from the comparable figures in 2019, due to improved Japan-Korea relations as well as a weaker yen.
  • On the first day of 2024, a magnitude 7.6 earthquake struck central Japan near the Noto Peninsula in Ishikawa Prefecture, and the death toll exceeded 200 amid the aftershocks. Some of the public transportation and roads in central Japan remained restricted due to ongoing repairs.
  • One of Tokyo's Haneda Airport’s runways, where a collision between a Japan Airlines passenger jet and a Japan Coast Guard plane happened, was reopened after a week, while it affected more than 200,000 passengers during the New Year holidays.

Macau SAR

  • Macau welcomed over 2.5 million visitor arrivals in November 2023, about 88% of the comparable figure in 2019. Hotel occupancy also recovered to 82.3% in the same month, 9.5% less than in 2019. On the other hand, Macau’s gross gaming revenue reached over MOP180 billion in 2023. According to the terms of casino license renewal, the six operators are obliged to increase their investment in non-gaming sectors by 20% if the gross revenue is greater than MOP180 billion. As a result, the total investment in non-gaming sectors is expected to increase from MOP108.7 billion to MOP130.4 billion.
  • The Macau Government Tourism Office (MGTO) allocated a budget of MOP235 million for expanding Macau’s international visitor market in 2024 through flight subsidies to Air Macau’s international flights, which exclude mainland China, Hong Kong SAR, and Taiwan. However, the effect might be limited as the international flights only cover seven countries in North and Southeast Asia.

The Philippines

  • According to the data from the Department of Tourism (DOT), over 5.4 million international visitors entered the Philippines in 2023, exceeding the 4.8 million visitors projected earlier. The recovery rate was approximately 66% compared to 2019. The international tourism receipts also surged to an estimate of PH482.5 billion in 2023, approximately the same record as in 2019. In 2024, DOT sets a target of 7.7 million international visitor arrivals, or around 93% of the recovery.
  • Following the guidance of the National Tourism Development Plan (NTDP) 2023–2028, DOT completed several projects aiming to improve connectivity between destinations and mobility between hubs. At the same time, DOT expects to boost domestic tourism in 2024 after the government introduces more long weekends in the country. Domestic tourism contributed about PH1.5 trillion last year, over three times more than inbound tourists.

Tourism Recovery in Asia Pacific

Source: AP Hospitality Advisors
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