Hotel Destinations Asia Pacific - Vietnam Business · ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy As of YTD March 2017, Mainland China was Bali’s

Hotels & Hospitality Group | May 2017

Hotel Destinations Asia Pacific

Tourism

Auckland

Supply

Demand

Outlook

Auckland International Airport, which is the ‘gateway’ for Auckland and New Zealand overseas visitors, has experienced strong growth. For the period YTD December 2016, total passenger movements have increased 12% with an increase recorded in domestic passenger movements, up 12.5% and international passengers increasing by 11.5%. International visitor arrivals to New Zealand reached 3.5 million for the period year ending February 2017, a 10.7% improvement over the corresponding prior year period.

Seven projects (comprising a total of 1,291 rooms) are currently under construction and are forecast to enter the market over the next two years, with five of the hotel projects (818 rooms) comprising 5-star product. The seven new hotel projects represent an approximate 20% increase in room supply, which is an unprecedented level of stock. However, as the room supply is expected to enter the market in a staggered manner (over a two to three-year period), this should alleviate some concerns of an oversupply shock.

Note: Auckland Hotels refer to MarketwideSource: Tourism Industry Association, Statistics New Zealand, JLLADR – Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Auckland reported an average occupancy level of 86.6% for the period year ending March 2017, the highest occupancy level on record in over 20 years. Auckland’s market occupancy has risen every year since 2010, after reaching a post-GFC low of 69.5% in 2009. FIT and Corporate business dominate the business mix of Auckland hotels contributing 47.5% and 20.5% of hotel guest nights respectively, y-o-y to March 2017. International sourced guests accounted for 45% of guest nights sold, while domestic guests accounted for 55%.

We anticipate that Auckland’s accommodation market will continue to perform strongly in the short term and is poised for further rate growth and to solidify recent gains in occupancy levels given the current capacity constraints, although ultimately the ‘wave’ of new supply is likely to ease capacity constraints in the medium term (between 2018 – 2019). Beyond the short term some caution is warranted as the market begins to absorb the forecast significant levels of room supply, which ultimately is expected to soften the current historic high occupancies (above 80%) with levels likely to revert in the medium to longer term to the mid-70% range.

Quick FactsInternational Visitor Arrivals (NZ 2016) Number of New Rooms (2017)

OCC ADR RevPAR

3.5 million 663 rooms 86.6% NZD 191 NZD 166

Jet Inn Extension, Auckland International Airport 60 rooms

Swiss-Belsuites Victoria Park 40 rooms

New notable hotels

Ibis Christchurch

Novotel Christchurch

Notable hotel deals

SKYCITY Hobson Street Hotel

Four Points by Sheraton

Park Hyatt Auckland

M Social Auckland (former Copthorne Hotel Auckland Harbourcity)

The Sebel Auckland Manukau

Upcoming hotels

1 Hotel Destinations – Asia Pacific

BaliQuick FactsInternational Visitor Arrivals (2016) Number of New Rooms (2017)

OCC ADR RevPAR

4.9 million 3,892 rooms 66.4% USD 146 USD 97

Mövenpick Resort & Spa Jimbaran

Wyndham Resort Tamansari Jivva

Sthala Ubud Bali

Sol House Legian

New notable hotels

There were no hotel transactions in H2 2016

Notable hotel deals

Kempinski Nusa Dua

Fairfield by Marriott Bali Legian

The Westin Ubud Resort & Spa

Six Senses Bali

Upcoming hotels

Tourism

Supply

Demand

Outlook

Total visitor arrivals were 4.9 million in 2016, representing an increase of 22.5% compared to 2015. As of YTD March 2017, international visitor arrivals continued an upward trend, increasing 22% y-o-y to reach 1.3 million visitors. For the full year 2017, the Bali Provincial Tourism Agency is targeting approximately 40% of the targeted 15 million foreign tourist arrivals to Indonesia in 2017, which is approximately six million foreign tourists. Strong growth in arrivals can be attributed to the extension of the visa waiver programme in 2015, as well as the improvement in air connectivity to key source markets such as Greater China and Australia.

Approximately 1,737 rooms opened in 2016, representing a 9.8% y-o-y increment. Recent major openings in 2016 include the 136-room Sol House Legian, the 222-room Wyndham Resort Tamansari Jivva, the 143-room Sthala Ubud Bali and 297-room Mövenpick Resort & Spa Jimbaran. In 2017, approximately 3,892 rooms are in the pipeline. Majority of the new supply in clustered in the luxury sector (44.3%) followed by the upscale sector (34.2%). In terms of location, most will be concentrated in the Nusa Dua and Uluwatu areas. However, it is not unusual for several projects to be postponed or cancelled due to financing difficulties.

Note: Bali Hotels refers to UpscaleSource: STR Global (YTD March 2017), Bali Government Tourism Office, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

As of YTD March 2017, Mainland China was Bali’s largest source marketing, contributing 29.6% of total visitor arrivals. This is followed by Australia contributing 19.8% of total visitor arrivals. Mainland China saw the largest y-o-y increase of 58.6%, underscoring the burgeoning Chinese travel demand in Asia. Despite travel advisories, most key source markets recorded strong growth in YTD March 2017, suggesting that foreign tourists are largely unfazed and are increasingly drawn to Bali as premier tourism destination.

Looking forward, visitor arrivals from key source markets are expected to continue rising. Recent improvements in air connectivity from Ngurah Rai International Airport with new flight routes, ongoing improvements in airport accessibility, and the extension of visa waiver programme should fuel the continued spike in foreign tourism demand in Bali. Moreover, the recent corporation between Indonesia and Chinese tourism authorities should provide an added boost to Indonesia’s overall tourism sector.

2Hotel Destinations – Asia Pacific

Tourism

Bangkok

Supply

Demand

Outlook

Bangkok received 20.8 million international visitors in 2016, representing an increase of 7.5% y-o-y, as Bangkok continues to be a top global destination after its resurgence in 2015 from the prior year’s 2014 political unrest. The passing of His Majesty King Bhumibol Adulyadej resulted in a minor dip in arrivals which recovered quickly as businesses return to usual. Record arrivals are expected in 2017 as early-year airport statistics are already indicating growth.

Since the beginning of 2017, approximately 800 rooms have been added to the Bangkok market with another 2,100 rooms estimated to enter the market by year-end. Over 35% of future supply over the next four years is concentrated in the upscale segment. Key new projects include ibis Styles Bangkok Sukhumvit 50, Grande Centre Point Sukhumvit 55, and ibis Bangkok IMPACT on Chaengwattana Road.

Note: Bangkok Hotels refers to UpscaleSource: STR Global (YTD March 2017), Tourism Authority of Thailand, Ministry of Tourism and Sports Thailand, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Mainland China remains the biggest source market to Bangkok, followed by Japan, India and South Korea. Bangkok has seen a slowdown in growth in visitor arrivals from Mainland China to 5.9% growth y-o-y in 2016 from 82.5% growth y-o-y in 2015. This comes as the government launched a crackdown on zero-dollar tours in September, leading a q-o-q drop in Chinese arrivals. Key markets which experienced strong growth include USA (12.7%), Middle Eastern countries (11.1%) and India (8.2%).

Bangkok will continue to see strong growth in visitor arrivals with ongoing airport expansions to increase capacity from 45 million to 60 million for Suvarnabhumi Airport, and from 28 million to 40 million for Don Mueang Airport. Higher airport capacities are expected to translate to lodging demand and absorb the oncoming room supply.

Quick FactsInternational Visitor Arrivals (2016) Number of New Rooms (2017)

OCC ADR RevPAR

20.8 million 2,876 rooms 86.4% THB 3,453 THB 2,983

Ibis Bangkok IMPACT 587 rooms

Grande Centre Point Sukhumvit 55 442 rooms

ibis Styles Bangkok Sukhumvit 50 171 rooms

New notable hotels

Swissotel Nai Lert Park

Notable hotel deals

The Bangkok EDITION by Ritz Carlton

Park Hyatt Bangkok

Lancaster Bangkok

Upcoming hotels


BeijingQuick FactsInternational Visitor Arrivals (2016) Number of New Rooms (2017)

ADR RevPAR

4.2 million 1,479 rooms 66.1% RMB 559 RMB 389

Grand Metropark Hotel Beijing 427 rooms

Grand Metropark Longxi Conference Center 346 rooms

InterContinental Beijing Sanlitun 300 rooms

Tylfull Hotel 226 rooms

Chao Clubhouse 180 rooms

New notable hotels

Somerset ZhongGuanCun Beijing

Notable hotel deals

Beijing Bvlgari Hotel

Mandarin Oriental Beijing

Hualuxe Beijing Xinan Hotel

The Puxuan Hotel and Spa

Muji Hotel Beijing

Upcoming hotels

Tourism

Supply

Demand

Outlook

Data from Beijing’s Tourism Bureau show the city’s international arrivals dropped 0.8% y-o-y to 4.2 million at the end of 2016. Visitors from South Korea and Japan decreased 8.8% and 4.0% respectively, due to their slower economy and economic environment. French and German travelers have also trended downwards by 12.3% and 2.9% respectively. The recent fall in the euro has led to a decline on business activities with Beijing’s long haul trading partners.

Just five new hotels opened in Beijing in 2016, adding 1,479 rooms to the market. High-profile openings included Intercontinental Beijing Sanlitun and Chao Clubhouse, both of which are located in Sanlitun. Strict development restrictions within the city centre are expected to continue to restrain future supply. Compared with Shanghai, where round 26 new hotels are expected to enter the market in 2017, just nine new hotels (2,204 rooms) are planned for Beijing.

Note: Beijing refers to Four Star hotelsSource: STR Global (YTD March 2017), Beijing’s Tourism Bureau, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Beijing’s hotel demand is driven by business travel as well as the tourism and MICE (Meetings, Incentives, Conferences and Exhibitions) travel segments. Corporate demand remains the major demand driver. As Beijing is the political and commercial centre in Mainland China, a large number of corporates have set up their headquarters in Beijing, generating considerable business demand.

The Beijing market will benefit from enhanced intercity transportation and tourism infrastructure development underway. Ahead of the opening of Universal Studios in 2020 and the 2022 Winter Olympics in Beijing and Zhangjiakou, several infrastructure upgrades in and around the city will support the hotel sector, including two new highways linking Beijing to nearby tourism destinations, such as Chongli, Yanqing, and Qinhuangdao.

OCC


Tourism

Brisbane

Supply

Demand

Outlook

In 2016, a total of 23.1 million visitor nights were spent in Brisbane City. International visitor nights accounted for 67.9% and domestic nights accounted for 32.1%. Domestic visitor nights in Brisbane increased by 5.3% y-o-y however international visitor nights in Brisbane decreased moderately by 1.6%.

New supply over the second half of 2016 in the Brisbane City market increased by approximately 217 rooms or an increase of approximately 2% on the existing stock. So far in 2017, two hotels have opened being the Sage Hotel James Street and the Holiday Inn Express Brisbane Central. Looking forward we are aware of a further six short term accommodation development current under construction and due for completion between 2017 and 2019. If all projects materialise, this will represent an increase of 1,376 rooms or 12% on the existing stock.

Note: Hotel supply within the Brisbane City RegionSource: STR Global (YTD March 2017), Tourism Research Australia (2016), JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Mainland China remains the biggest source market to Brisbane, followed by Korea, Taiwan and the United Kingdom. In 2016, Chinese visitor nights in Brisbane City grew 14.7% year-on-year and has grown at an average annual rate of 25.2% over the last 10 years. While leisure related demand remains the primary purpose of visit, the employment segment increased significantly during 2016 in Brisbane City.

In the short to medium term, conditions are likely to remain stagnant as further supply enters the market. Any notable uplift in performance will also be dependent on the extent of recovery in the corporate and conference segment as well as growth in the leisure segment. Resource sector demand may improve over the medium term with renewed investment in mining infrastructure projects, however a timeframe on these potential trends remains unclear.

Holiday Inn Express Hotel 226 rooms

Swiss Belhotel Brisbane 134 rooms

Sage Hotel James Street 93 rooms

Art Series Hotel - The Johnson 83 rooms

New notable hotels

Jephson Hotel

Notable hotel deals

W Hotel Brisbane

Southpoint Emporium Hotel

Adina on George Street

Westin Hotel Brisbane

Upcoming hotels


OCC ADR RevPAR

935,000 207 rooms 71.5% AUD 152 AUD 109


DelhiQuick FactsInternational Passenger Traffic (India 2016) Number of New Rooms (2017)

ADR RevPAR

8.9 million 540 rooms 83.1% INR 5,660 INR 4,702

Andaz Delhi 401 rooms

Muse Sarovar Portico 73 rooms

New notable hotels

Aloft New Delhi Aerocity

Holiday Inn Express & Suites Delhi

Upcoming hotels

There were no hotel Transactions in H2 2016

Notable hotel deals

Tourism

Supply

Demand

Outlook

Delhi has shown growth of 10.1% in international passenger arrivals YTD February 2017 from approximately 2.5 million to 2.8 million. Foreign arrivals have recorded noticeable rises after the e-visa facility was introduced, now available to over 150 countries, boosting leisure demand from foreign visitors. The new visa improvements are relevant to leisure tourism including visiting friends and family, short duration medical treatment and business visits.

Andaz Delhi and the Roseate House in the Aerocity hospitality district have been the most notable hotel openings recently. Future supply in Delhi remains fairly limited due to scarcity of land and high land prices in the city and new supply will be largely concentrated to the Aerocity hospitality district. The Aerocity has been a key hospitality district as its strategic positioning has enabled Aerocity to absorb commercial, transit arrival and MICE demand from both the Delhi and Gurgaon micro-markets. The Oberoi New Delhi will be closed effective from April 1, 2016, for major renovation and will reopen April 1 in 2018.

Note: Delhi Hotels refers to Delhi DeluxeSource: STR Global (YTD March 2017), Airports Authority of India, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

In 2016, Delhi witnessed continued growth in demand– largely driven by growing MICE and corporate demand, in addition to improved spending capacity and the increased presence of low-cost air carriers. The newly developed Delhi Aerocity hospitality district with over 3,200 hotel rooms, extensive banqueting space and the presence of significant Grade A office space, has seen promising demand levels.

The Delhi hospitality market has remained resilient, despite the largest supply increase that the city has seen in the recent past - in the form of the Aerocity hospitality district. While ADR levels have seen some softening due to a large volume of supply in the Midscale to Upper Upscale segments, demand levels have remained strong. With hotel supply slowing and growing demand, Delhi continues to present investors with a strategic entry into the gateway of the country.

OCC


Tourism

Hanoi

Supply

Demand

Outlook

In 2016, Hanoi saw four million international visitor arrivals, up an impressive 21.2% y-o-y, and exceeding Vietnam National Administration of Tourism’s (VNAT) initial expectations of 3.8 million. This represents a five-year Combined Annual Growth Rate (CAGR) of 16.1% from 2011 to 2016. As of March 2017, the city has seen six million visitors, a 7% y-o-y growth, of which over one million are international visitors.

In 2016, just over 200 new rooms were added to the Hanoi hotel market in addition to rebranded supply, however 2017 expects to see a much larger addition with over 800 branded hotel rooms to enter the market by year-end. A further 2,000 rooms will be launched by 2020. Between 2017 and 2020, almost 60% of new room supply or 1,700 rooms will be in the luxury segment.

Note: Hanoi hotels refers to MarketwideSource: STR Global (YTD March 2017), Vietnam National Administration of Tourism, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Top source markets to Vietnam include Mainland China, South Korea, Japan and the USA. While continuing its promotional efforts in Japan, Hanoi also aims to expand its market in Russia and France through cooperation with international agencies and diplomatic representatives. In its tourism drive, Hanoi will position itself as a cultural destination for its food culture and well-preserved relic sites.

The VNAT continues to strongly market Hanoi as a cultural destination through an advertising campaign with CNN across its international network. The campaign will run on both CNN’s on air and online media from 2017 to 2018. In addition to ongoing initiatives within Hanoi, to further enhance its tourism offerings, Hanoi looks to link its tourism coordination with other northern localities to lengthen international length of stay. With VNAT’s initiatives expected to drive the increase in visitor arrivals the outlook for the market remains positive.


OCC ADR RevPAR

4.0 million 843 rooms 85.2% USD 113 USD 96

Novotel Suites Hanoi 151 rooms

New notable hotels


Notable hotel deals

Novotel Ciputra Hanoi

Novotel Hanoi Thai Ha

Somerset West Point Hanoi

Upcoming hotels


Ho Chi Minh CityQuick FactsInternational Visitor Arrivals (2016) Number of New Rooms (2017)

ADR RevPAR


Ibis Saigon Airport 282 rooms

New notable hotels


Notable hotel deals

Ascott Waterfront Saigon

Ritz-Carlton Saigon

Starcity Airport Hotel

Viettel Complex

Upcoming hotels

Tourism

Supply

Demand

Outlook

International arrivals to Ho Chi Minh City reached 5.2 million in 2016, a 10.6% growth y-o-y exceeding the government’s initial expectations of an 8.5% increase. Between 2011 and 2016, the city registered a Compound Annual Growth Rate (CAGR) of 10.9%. The growth comes as the city stepped up its efforts to enhance arrivals and average spending with more festivals with a focus on culture and eco-tourism as well as attending travel marts and roadshow overseas.

2016 saw 703 new rooms added to the market. As the city gains traction as an international tourist destination, over 3,500 rooms are expected to be added to the market by 2020, with 1,000 keys expected in 2017. While much of the existing international and locally branded hotels are in the Upscale (35.4%) and Midscale (27.8%) segments, upcoming additions (2017-2020) are concentrated in the Luxury (48.4%) and Upscale (42.4%) segments. Notable openings in 2016 include ibis Saigon Airport in Tan Binh District and Bay Hotel Ho Chi Minh in District 1.

Note: Ho Chi Minh City Hotels refers to MarketwideSource: STR Global (YTD March 2017), Vietnam National Administration of Tourism, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Key source markets to Vietnam include Mainland China, South Korea, Japan and the USA. While continuing its promotional efforts in Japan, Ho Chi Minh City also aims to expand new markets, targeting Russia and India as future growth markets as the city looks to grow international arrivals to near six million in 2017. The domestic market relies on the city as a key economic and recreational hub with 21.8 million visitors in 2016, and 24 million targeted for this 2017.

Named by Conde Nast Traveler as among the 50 most beautiful cities in the world, Ho Chi Minh City is fast becoming an international tourist destination as the government continues to focus efforts on marketing as well as improving tourist attractions and safety. With ongoing upgrading of museums and approval for a safari and Saigon Cultural and Tourism Village, the People’s Committee is developing a tourism development strategy through to 2030 and beyond to ensure sustainable tourism development.

OCC


Tourism

Hong Kong

Supply

Demand

Outlook

Total visitor arrivals declined 4.5% in 2016 compared to 2015 mainly due to the sharp decline of same-day visitors from Mainland China. In April 2015, the Mainland restricted Shenzhen permanent residents to just one entry per week, which has largely contributed to the same-day visitor decline of 8.7% y-o-y. On the other hand, the rate of decline in total overnight visitor arrivals has slowed from being down 5.2% in 2015 to 0.5% in 2016, showing signs that we are beginning to see improvement in Mainland arrivals.

Approximately 888 rooms have been added into the market last year, most of which are small to medium sized midscale/economy properties in Hong Kong Island and Kowloon. So far in 2017, two hotels have opened, Attitude on Granville with 81 rooms, and the Silka Tsuen Wan with 409 rooms. Approximately 6,000 rooms remain in the pipeline. Notable openings are: Disney’s Explorer’s Lodge with 750 rooms, Rosewood Hong Kong in Tsim Sha Tsui with 600 rooms, the Kerry Hotel by Shangri-La with 545 rooms, and The Murray, a Niccolo Hotel with 336 rooms.

Note: Hong Kong refers to Upscale hotelsSource: STR Global (YTD March 2017), Hong Kong Tourism Bureau, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Mainland China is Hong Kong’s largest source market, contributing 75.5% of all total visitor arrivals in 2016. Over the same period, the number of overall visitors from Mainland China continued to fall, down by 6.7% y-o-y to 42.8 million arrivals. This can be attributed to the socio-political tension, stronger local currency, tightened visa policy for Shenzhen visitors, and increasing competition from other destinations such as Japan and South Korea, which drew significantly more visitors from the Mainland.

The increase in supply and economic uncertainties are expected to limit growth in hotel performance. 2016 has set the stage for a relatively uncertain 2017, with ‘Brexit’ expected to limit European visitors. As a major corporate hub, Hong Kong is always affected by global economic concerns and this remains still in recovery. However, we are cautiously optimistic that hotel performance is likely to return to stabilised levels over the medium term, as Hong Kong has proven itself to be a resilient city on the back of its multi-faceted appeal for FIT, leisure, corporate as well as MICE-related demand. It is however increasingly competing with cheaper Shanghai for the latter.


ADR RevPAR

56.7 million 1,022 rooms 83.7% HKD 1,755 HKD 1,469

Silka Tsuen Wan 409 rooms

Attitude on Granville 81 rooms

New notable hotels

Newton Place Hotel Kwun Tong

Rosedale Causeway Bay

J Plus Hong Kong

Notable hotel deals

Kerry Hotel by Shangri-La

Disney’s Explorer’s Lodge

Rosewood Hong Kong

The Murray, a Niccolo Hotel

Upcoming hotels

OCC


JakartaQuick FactsInternational Visitor Arrivals (2016) Number of New Rooms (2017)

ADR RevPAR


Westin Jakarta 272 rooms

Mercure Jakarta Cikini 207 rooms

Four Points by Sheraton Jakarta Thamrin 164 rooms

Four Seasons Hotel Jakarta 125 rooms

New notable hotels


Notable hotel deals

Swiss-Belhotel Resuna Epicentrum

Holiday Inn Simutupang

Swiss-Belhotel Kelapa Gading

InterContinental Pondok Indah

Upcoming hotels

Tourism

Supply

Demand

Outlook

As of YTD February 2017, international visitor arrivals rose by 17.5% y-o-y to reach 373,219 visitors. Strong y-o-y growth from 2016 underpinned the recovery in tourism confidence following the bombing attacks in the Indonesian capital in January 2016, particularly amongst foreign tourists. Continued benefits arising from the extension of the visa waiver programme to an additional 45 countries in 2015 also contributed to overall visitor growth.

Approximately 1,334 rooms opened in 2016, representing y-o-y increment of 2.3%. Majority of the hotel openings were in the Central region. Major openings in 2016 include the 125-room Four Seasons Hotel Jakarta, the 272-room Westin Jakarta, the 207-room Mercure Jakarta Cikini and the 125-rooms Four Points by Sheraton Jakarta Thamrin. In 2017, approximately 3,193 rooms are in the pipeline. Notable openings in 2017 include the 312-room Swiss-Belhotel Kelapa Gading, the 323-room Swiss-Belhotel Resuna Epicentrum, the 316-room Holiday Inn Express Simatupang and the 300-room InterContinental Pondok Indah.

Note: Jakarta Hotels refers to UpscaleSource: STR Global (YTD March 2017), Singapore Tourism Board, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Despite the recent terror attacks in Jakarta in January 2016, overall tourism demand continued its upward trend, underpinned by strong corporate demand. This is attributed to the fact that Jakarta remains a key business gateway into Indonesia, which holds huge economic potential. This should continue to attract international and domestic corporate demand into the city. However, ongoing global uncertainty, coupled with terrorism concerns, should continue to weigh on tourists’ minds.

Continued tourism promotion efforts by the Ministry of Tourism through its “Wonderful Indonesia” campaign is expected to improve visitation into Indonesia. With tourism identified as a key economic driver, coupled with ongoing infrastructure projects, the tourism sector should expect to get an added boost. Approximately 9,786 rooms are in the pipeline from 2017-2020 in Jakarta.

OCC


Tourism

Kuala Lumpur

Supply

Demand

Outlook

Total international visitor arrivals to Malaysia reached 26.8 million in 2016, an increase of 4.0% compared to 2015. Tourism receipts rose by 18.8% y-o-y to MYR 82.1 billion compared to MYR 69.1 billion in 2015. Tourism Malaysia is targeting a total of 31.8 million international tourist arrivals in 2017 with tourism receipts of MYR 118 billion. Malaysia’s stronger tourism performance in 2016 is attributed to improved flight accessibility as well as currency depreciation making it a more affordable destination for international tourists. By 2020, the vision is to achieve 36 million tourist arrivals and MYR 168 billion in tourism receipts.

Approximately 2,200 rooms opened in 2016, an increase of 5.3% y-o-y. New openings in 2016 include the 383-room Holiday Inn Express Kuala Lumpur City Centre, the 247-room Oasia Suites Kuala Lumpur, the 208-room St Regis in KL Sentral and the 347-room The Cosmos Hotel Kuala Lumpur along Jalan Ampang. The majority of the new supply, or 72%, was in the midscale segment, with the St Regis the only new luxury hotel to open in 2016.

Kuala Lumpur is predominantly a corporate market with strong weekday business, but relatively little leisure demand and lower weekend occupancy. Singapore was the top source market to Malaysia in 2016 and accounted for 13.3 million or 49.6% of all international tourist arrivals to Malaysia, an increase of 2.6% y-o-y. Second to Singapore was Indonesia with 3.0 million arrivals, an increase of 26.7% and thirdly Mainland China with 2.1 million arrivals, a significant growth of 9.4% y-o-y.

Over supply of hotel rooms remains a key concern in Kuala Lumpur despite the Malaysian governments continued commitment to promoting the city as a key MICE destination. It is estimated that approximately 9,000 new hotels rooms are in the pipeline between 2017 and 2022, 33% of which will be in the luxury segment and a further 62.4% in the upscale segment. While not all of this supply is guaranteed, it is a concern for a city which is already experiencing significant pressure on rates and occupancy.

Quick FactsInternational Visitor Arrivals (Malaysia 2016) Number of New Rooms (2017)

OCC ADR RevPAR

26.8 million 2,771 rooms 68.7% MYR 537 MYR 369

St Regis Kuala Lumpur 208 rooms

Sunway Pyramid Hotel West 401 rooms

New notable hotels


Notable hotel deals

Element Kuala Lumpur

W Hotel Kuala Lumpur

Four Seasons Place Kuala Lumpur

Fairmont Kuala Lumpur

Alila Bangsar

Upcoming hotels

Note: Kuala Lumpur Hotels refers to Luxury and UpscaleSource: STR Global (YTD March 2017), Tourism Malaysia, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy


MacauQuick FactsInternational Visitor Arrivals (2016) Number of New Rooms (2017)

ADR RevPAR

31 million 2,000 rooms 85.2% MOP 1,372 MOP 1,169

The Parisian 3,000 rooms

Wynn Palace 1,700 rooms

New notable hotels


Notable hotel deals

The 13

MGM Cotai

Lisboa Palace

Palazzo Versace Macau

Roosevelt Hotel Macau

Upcoming hotels

Tourism

Supply

Demand

Outlook

In 2016, international visitor arrivals to Macau stayed relatively flat, improving by 0.8% y-o-y to 31.0 million. The gaming industry showed signs of recovery with data released by Macau’s Gaming Inspection and Coordination Bureau recording gross gaming receipts rising 3.1% to MOP 19.3 billion in January 2017.

According to the Macau Government Tourism Office, total hotel rooms in Macau amounted to 37,634 rooms with a 13.9% increase in supply compared to 2015. The growth in supply was contributed mainly by two major hotel openings in 2016: Wynn Palace (1,700 rooms) and at almost double the size Parisian (3,000 rooms). Upcoming major supply additions include MGM Cotai (1,500 rooms) scheduled to open during the second half of 2017, and the ultra-luxury hotel “The 13” (200 suites) scheduled to open in early 2017.

Note: Macau refers to Marketwide hotelsSource: STR Global (YTD March 2017), Macao Government Tourism Office, Gaming Inspection & Coordination Bureau Macau, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

With a total of 20.5 million visitor arrivals recorded in 2016, Mainland China remained Macau’s top source market, contributing 66.1% to total visitor arrivals. Following a drastic fall in 2015, the Mainland Chinese market gained some momentum in December 2016, growing by 7.8% compared to December 2015, ending the year with a 0.2% negligible improvement.

Macau’s economy is driven by the gaming sector. However, casino operators are keen to diversify into other non-gaming sectors including theme parks, sporting and other entertainment options as well as the international MICE market. To attract more visitors, the government is also improving infrastructure including the development of the Taipa Ferry Terminal, the Macau Light Rapid Transit and the development of a large scale integrated development zone with strong finance, technology, and leisure generators on Hengqin Island.

OCC


Tourism

Maldives

Supply

Demand

Outlook

In 2016, the Ministry of Tourism launchedthe ‘Visit Maldives Year 2016’ campaign,aiming to attract 1.5 million internationalvisitors for the first time. As part of thecampaign, the government conductedvarious national and international activitiesto strengthen the Maldives’ brand andmarket the country as an exclusivedestination. As at December 2016, visitorarrival numbers have increased by 4.2%y-o-y, aided by growth in the Indian and UKsource markets in particular.

According to the Ministry of Tourism, a total of 122 resorts with 26,089 beds, 16 hotels with 1,713 beds, 373 guest houses with 5,509 beds and 142 safari vessels with 2,608 beds were registered in the Maldives as at October 2016. Of the registered capacity, 28,052 beds are considered operational, comprising 24,516 beds in 114 resorts, 1,509 beds in 13 hotels, 929 beds in 58 guest houses and 1,098 beds in 63 vessels. New hotel openings in the Maldives are less common compared to city or other established resort destinations because of the high cost of construction and level of expertise required in operating a resort. Nevertheless, we are aware of five openings in 2015 and a further ten in 2016, adding 1,316 rooms to supply.

Note: Maldives Hotels refers to MarketwideSource: STR Global (YTD March 2017), Ministry of Tourism, Arts & Culture, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

As the leading source market to theMaldives, Mainland China made up about29.1% of total visitor arrivals in 2015,approximately three and a half times thatof the second largest source market,Germany. Growth in the Mainland Chinesemarket has been remarkably fast over thepast few years, from 60,666 visitors in 2009to 359,514 in 2015. The latest tourismnumbers indicate that while MainlandChina remains the leading source market,comprising 25.2% of the market as at 2016, overall arrivals fell by 9.8% y-o-y.

Despite the challenging macro environment, the Maldives government remains committed to growing and investing in its tourism market. The Maldives Marketing & Public Relations Corporation launched the ‘Visit Maldives Year 2016’ marketing campaign early this year and has organised a series of trade road shows in Tier One cities in India such as New Delhi, Bangalore, Kolkata, Mumbai and Chennai. Looking forward, while the operating market is likely to be challenging in the short term, we expect that increased marketing campaigns, ongoing tourism infrastructure improvements and increased airlift from other markets will benefit the medium to long term prospects of the Maldives.


OCC ADR RevPAR


Amilla Finolhu 125 rooms

Amari Havodda 120 rooms

Furaveri Island Resort & Spa 105 rooms

Atmosphere OZEN 90 rooms

Four Seasons Voavah Private 7 rooms

New notable hotels

Grand Park Kodhipparu

J Resorts Kuda Rah

Zitahli Kuda Funafaru Resort & Spa

Notable hotel deals

Zitahli Resort & Spa

JW Marriott Maldives

Centara Hudhufushi Resort & Spa

Pullman Maldives

Cheddi Dhapparu

Upcoming hotels


ManilaQuick FactsInternational Visitor Arrivals (Philippines 2016) Number of New Rooms (2017)

ADR RevPAR


Tourism

Supply

Demand

Outlook

Total international visitor arrivals to the Philippines reached 5.8 million in 2016, an increase of 12.9% compared to 2015. As at YTD February 2017, international visitor arrivals reached 1.2 million, an increase of 13% y-o-y. Tourism activities as at YTD February 2017 generated earnings amounting to PHP 40.1 billion, down by 18.9% y-o-y from the 49.4 million achieved in the corresponding period of the previous year. Regionally, East Asia contributes the majority of international visitor arrivals to the Philippines, accounting for 52.6% as at YTD February 2017, or 0.6 million.

Approximately 2,429 rooms opened in 2016, an increase of 7.3% y-o-y. New openings in 2016 included the 576-room Shangri-La at the Fort in Bonifacio Global City, the 347-room Conrad Manila at the Mall of Asia Complex, Phase 2 of the Marriott West Wing at Resorts World Manila, which added 228-rooms to the existing hotel and the 396-room Novotel Manila Araneta Center. In March 2017, the Okada Manila celebrated its grand opening, and the USD 2 billion integrated resort casino will house over 500 table games, more than 3,000 electronic gaming machines and 993 hotel rooms.

Note: Manila Hotels refers to MarketwideSource: STR Global (YTD March 2017), Philippines Department of Tourism, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

As at YTD February 2017, South Korea is the biggest visitor-generating market to the Philippines, with total arrivals of 0.3 million, or 25.2%, of the total. The USA is the second largest market, followed by Mainland China, Japan and Australia. Among the top ten source markets, India showed the highest growth of 28% y-o-y followed by Mainland China at 25.4% y-o-y. Other markets which enjoyed substantial growth were Vietnam (+30.0%) and European countries such as France (+27.6%) and Russia (+29.2%).

Manila remains attractive to both the corporate and leisure markets given its status as a hub for the BPO sector and the rapidly developing integrated resorts in the Manila Bay area. Belle Corp recently announced that it is considering an extension of the City of Dreams, Manila integrated casino resort as it is currently operating at full capacity. Belle Corp has an 8,500 square metre piece of land across from the City of Dreams that could serve as a non-gaming expansion of the resort. The continued development of the gaming industry in Manila will help attract more leisure demand and transform the local tourism industry.

Shangri-La at The Fort 576 rooms

Novotel Manila Araneta Center 396 rooms

Conrad Manila 347 rooms

Marriott West Wing – Resort World Manila 228 rooms

New notable hotels


Notable hotel deals

Okada Manila

Grand Hyatt Manila

Sheraton Manila

Savoy Hotel Newport City

Mandarin Oriental Manila

Upcoming hotels

OCC


Tourism

Melbourne

Supply

Demand

Outlook

In 2016, a total of 36 million visitor nights were spent in Melbourne City representing 6.1% of all visitor nights in Australia. International visitor nights accounted for 64.5% and domestic nights accounted for 35.5%. Domestic visitor nights in Melbourne increased by 11.1% y-o-y and international visitor nights in Melbourne increased by 3.8% y-o-y.

During H2 2016, approximately 340 rooms were added into the market, including Punthill Northbank Melbourne (130 guest rooms), the QT Hotel Melbourne (184 guest rooms) as well as the completed extension of the Stamford Plaza Melbourne (26 guest rooms). So far in 2017, the Four Points by Sheraton Docklands is the only hotel that has opened. Looking forward we are aware of five short term accommodation developments currently under construction and due for completion by 2020. If all projects materialise, this will represent an increase of 1,498 rooms of 7.6% on the existing stock.

Note: Hotel supply within the Melbourne City RegionSource: STR Global (YTD March 2017), Tourism Research Australia, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Mainland China is Melbourne’s largest source market, contributing 31.9% of all international visitor arrivals in 2016. Melbourne’s calendar of major global events and international conference program is a draw card for visitors to the city and has contributed to the growth in the accommodation market. A strong calendar of international events in the second half of the year, including the Melbourne International Film Festival, AFL Grand Final as well as Melbourne Cup Carnival and Boxing Day Test Match saw leisure demand increase over the balance of the year.

Melbourne’s accommodation market has experienced a robust level of growth over the last five years capitalising on the city’s extensive calendar of events and the closure of the Sydney Convention and Exhibition Centre between 2014 and 2016. Melbourne City also has a long history of investment in tourism and transportation infrastructure as well as successfully marketing of the city nationally and globally. Notwithstanding this, the underlying market buoyancy of recent years is anticipated to moderate slightly over the medium term as the development pipeline continues to build.


OCC ADR RevPAR

1.7 million 273 rooms 88.3% AUD 218 AUD 192

Ibis & Novotel Little Lonsdale Street

Novotel Southbank Melbourne

W Hotel Melbourne

Upcoming hotels

Four Points by Sheraton 273 rooms

QT Hotel Melbourne 184 rooms

Punthill Northbank Melbourne 130 rooms

Stamford Plaza Melbourne Extension 26 rooms

New notable hotels

Novotel on Collins

Hilton South Wharf

Travelodge Docklands

Notable hotel deals


Osaka

Tourism

Supply

Demand

Outlook

In 2016, a total of 15.6 million visitor nights were spent in Osaka City. The number of international accommodation guests which accounts for around one third of total accommodation guests in Osaka, increased by 22.8% y-o-y. The number of domestic accommodation guests also increased by 5.4%. New rides added to Universal Studios Japan (USJ) as well as seasonal exhibitions and events have benefited the tourism industry in Osaka.

According to Japan Ministry of Health, Labour and Welfare, hotel and ryokan supply in Osaka City accounted 678 properties (59,272 rooms) as at March 2016. There have been limited new additions to supply of full-service hotels however, there were approximately 450 new and refurbished rooms that commenced trading.

Note: Osaka Hotels refers to MarketwideSource: STR Global (YTD March 2017) Japan Tourism Agency, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

International demand remained strong in Osaka in 2016, although growth has slowed as compared to 2015, mainly driven by the JPY appreciation trend that started in the second half of 2015. Airbnb has definitively made an impact on the local hotel market. According to a recent Airbnb press release, Osaka prefecture recorded the highest usage rate in Japan last year.

In January 2017, a new terminal designated for low cost carriers commenced operation at Kansai International Airport and it is expected to boost incoming tourism numbers. The supply pipeline remains limited with the bulk of new hotels categorised as limited-service hotels. Osaka is expected to witness flat trading performance in 2017 as international tourism growth is expected to be the same, coming of a strong 2015-16 that was unsustainable after visa restrictions on countries including China were lifted causing record inbound numbers.

Quick FactsInternational Accommodation Guests (2016) Number of New Rooms (2017)

ADR RevPAR

9.4 million 164 rooms 78.9% JPY 23,035 JPY 18,170

Premier Hotel Cabin Osaka (Rebranded) 240 rooms

Natural Hot Spring Onyado Nono Namba 168 rooms

Conrad Osaka 164 rooms

Hotel Trad 47 rooms

New notable hotels

Hyatt Regency Osaka

Hotel Vista Grande Osaka

Notable hotel deals

Hotel WBF Yodoyabashi Minami

Upcoming hotels

OCC


Tourism

Phuket

Supply

Demand

Outlook

International visitor arrivals through Phuket International Airport reached 4 million visitors in 2016, recording an improvement of 15% over 2015. The resurgence of Russian visitors was a key driver in tourist arrivals. Further growth is expected in 2017 with airport statistics already indicating growth in the early months of the year. In September 2016, the expansion of Phuket International Airport was completed which increased capacity from 6.5 million to 12.5 million per year.

During 2017, approximately 950 rooms are expected to enter the market, of which 101 rooms have been completed as at March 2017. The west coast (including Patong, Kalim and Kamala) remains the most popular location for new developments, comprising approximately 60% of future supply between 2017 and 2020.

Note: Phuket Hotels refers to MarketwideSource: STR Global (YTD March 2017), Department of Tourism Thailand, Ministry of Tourism and Sports Thailand, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

In 2016, Mainland China, Russia and Australia remained Phuket’s top three source markets, according to arrivals passing through immigration at Phuket International Airport. Despite continuing to account for almost 40% of international arrivals through Phuket, Mainland China showed slower growth compared to previous years as a result of the year-end crack down on zero dollar tours. The fastest growing source market was Russia, as visitor arrivals saw a resurgence, improving 47.4% y-o-y in 2016.

Despite the halt on zero-dollar tours by the Thai authorities, the increase in the number of high-value Chinese independent travellers and the growth of the niche honeymoon market as well as a resurgence of the Russian market have all kept the island’s tourism industry positive. With the rise of these new markets, we expect Phuket to benefit from a positive outlook with limited new supply.


OCC ADR RevPAR

4.0 million 950 rooms 87.9% THB 5,131 THB 4,512

Rosewood Phuket

The Hermitage Kata Phuket

Mövenpick Resort Mai Khao Phuket (Formerly D Varee Mai Khao Beach Phuket Resort)

Upcoming hotels

Fishermen's Harbour Urban Resort 389 rooms

Wyndham Grand Phuket 214 rooms

Hyatt Place Phuket Patong 161 rooms

New notable hotels

Boathouse Resort on the Beach Phuket

Notable hotel deals


SeoulQuick FactsInternational Visitor Arrivals (South Korea 2016) Number of New Rooms (2017)

ADR RevPAR

17.2 million 1,362 rooms 71.7% KRW 95,172 KRW 68,284

Tourism

Supply

Demand

Outlook

Total visitor arrivals to South Korea were 17.2 million in 2016, representing an increase of 30.3% compared to 2015. As of YTD March 2017, international visitor arrivals increased 3.2% y-o-y to reach 3.7 million visitors. Improving visitor arrivals in 2016 were largely attributed to the record influx of Chinese tourists, buoyed by concerted marketing efforts and the easing of visa rules to target a growing group of Chinese independent tourists. The ongoing difference of opinion between South Korea and Mainland China over the deployment of THAAD missile system has drastically affected relations between both countries, resulting in a significant fall in Chinese tourism demand.

According to JLL estimates, approximately 3,588 rooms opened in 2016, representing a 5.9% y-o-y increment. Most of the recent hotel openings were concentrated in the Myeongdong area. Recent openings include the 430-room Lotte City Hotel Myeongdong, the 409-room Courtyard by Marriott Seoul Namdaemun, the 576-room Tmark Grand Hotel Myeongdong and 408-room Nine Tree Myeongdong II. In 2017, approximately 1,362 rooms are in the pipeline.

Note: Seoul Hotels refers to Midscale & EconomySource: STR Global (YTD March 2017), Seoul Tourism Board, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

As of YTD March 2017, Mainland China remained as Seoul’s largest source market, contributing 40.9% of total visitor arrivals. This is followed by Japan contributing 16.1% of total visitor arrivals. Most of the key source markets experienced y-o-y growth in YTD March 2017. The exceptions were Mainland China and Hong Kong, which registered decreases of 9.2% and 3.8% respectively. The significant fall in Chinese tourists underscore the negative impact on South Korea’s tourism sector arising from the ongoing THAAD dispute, in which Beijing recently banned its travel agencies from offering travel packages to South Korea in March 2017.

Investors continue to pay close attention to the ongoing THAAD dispute, which could undermine stability in the region. Considering that Mainland China is the largest source market to South Korea, any changes in relations between both countries is bound to have a ripple effect on South Korea’s tourism sector. Nevertheless, local tourism and hospitality businesses which have overly relied on Chinese visitors are currently reassessing developments, looking to attract more visitors from other countries and promoting domestic travel.

Courtyard by Marriott Namdaemun 409 rooms

Nine Tree Myeongdong II 408 rooms

Shilla Stay Guro 310 rooms

Aloft Seoul Myeongdong 223 rooms

New notable hotels

Conrad Seoul

Belle Essence Hotel Seoul

Solaria Nishitetsu Seoul

Notable hotel deals

Lotte Signiel Hotel Seoul

Ramada Encore Seoul Magok

Four Points by Sheraton Seoul Gangnam

Upcoming hotels

OCC


Tourism

Seychelles

Supply

Demand

Outlook

With the benefit of improving flight connectivity, Seychelles Tourism Board’s strategy to focus on Asia to decrease reliance on the European market has worked well, evidenced by the healthy growth in Indian and Mainland Chinese visitor arrivals in the past five years. In 2016, the Indian and Mainland Chinese source markets comprised together approximately 8.5% of total visitor arrivals, which is a slightly higher proportion compared to 2015, when the two source markets combined comprised 7.8%.

According to the Seychelles Tourism Board, there are around 35 large hotels with 2,360 hotel rooms as at end of 2016. Most of the hotels are concentrated on Mahé and Praslin, where air access is easier due to the presence of airports. In the past, the Seychelles hotel market supply has been dominated by small owner-operated properties. However, in recent years, there has been a proliferation of international branded hotels, approximately 44.8% of the large hotel rooms are brand affiliated. Some of the international brands include Le Meridien, Four Seasons, Hilton, Avani, Raffles, Berjaya, Banyan Tree and Kempinski.

Note: Seychelles Hotels refers to MarketwideSource: Seychelles Tourism Board, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Last year, the top three source markets remained France (14.7%), Germany (13.4%) and Italy (7.6%). France has traditionally been one of the largest source markets to Seychelles due to its historical connection and similar cultural tradition. However, due to France’s sluggish economy and the cancellation of direct flights in 2011, the French source market has been stagnant in the past five years. However, with the introduction of direct flights from Paris to Mahé in 2015, the French source market grew to 40,297 visitor arrivals.

Although Seychelles has not achieved the same level of tourism growth as the Maldives over the past few years, the country has the potential to improve in the short to medium term. Improvements in air infrastructure and accessibility will be critical to its success, as evidenced by the new direct flights to Paris and Mainland China having generated a significant increase in international visitor arrivals. A likely impediment for tourism demand in Seychelles would be the spill over effect of ‘Brexit’ on the European economy, especially given the country’s reliance on European source markets. However, the increased emphasis on the Asian and Middle Eastern source markets, coupled with continued developments in infrastructure and airlift, are likely to benefit trading performance going forward.


ADR RevPAR

303,000 127 rooms 75.7% USD 175 USD 132OCC

Four Seasons Desroches Island

Upcoming hotels

Six Senses Zil Pasyon 47 rooms

Carana Beach 40 rooms

The Oasis Hotel & Restaurant 30 rooms

New notable hotels

There were no hotel transactions in 2016

Notable hotel deals


ShanghaiQuick FactsInternational Visitor Arrivals (2016) Number of New Rooms (2017)

OCC ADR RevPAR

8.5 million 5,428 rooms 65.8% RMB 560 RMB 539

Tourism

Supply

Demand

Outlook

The rate of growth in international arrivals has continued its positive trajectory. Data from Shanghai’s Tourism Bureau show the city’s international arrivals climbed 6.8% y-o-y to 8.5 million at the end of 2016. Although economic and trading activities softened in major Asian source markets, visitors to Shanghai grew including a 13.1% increase from South Korea and a 3.1% rise from Japanese visitors. This again proves Shanghai’s leading position as a core trading and financial hub across the Mainland.

In 2016, a total of 18 hotels positioned in the upscale and midscale levels commenced trading, largely driven by the opening of Shanghai Disney Resort. Soon, Shanghai will overtake the previous 2010 supply peak, the year when Shanghai Expo was held. From 2017 onwards, approximately 14,000 rooms will be added to the market over consecutive years, registering 21% growth on existing supply.

Note: Shanghai refers to Four Star hotelsSource: STR Global (YTD March 2017), Shanghai’s Tourism Bureau, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Shanghai’s hotel demand is mainly driven by the corporate sector. Shanghai is one of the Yangtze River Delta’s major commercial centers, and business travel is the dominant source of hotel demand, thanks to a steady stream of visitors involved in the city’s finance and service industries. The recent opening of Shanghai Disney Resort has been a boon for strong growth in domestic tourism in Shanghai and becoming a major drawcard for regional visitors as well.

Although Shanghai foresees an influx of room additions in the short term, we expect trading performance to be driven by demand generated by fast city development including the expansion of city’s sub-centers and entertainment precincts including Polar Ocean World and a potential Lego Land project. New projects are concentrated in peripheral areas such as Jiading, Songjiang and Chongming so we expect some pressure on room rates in the outer areas of Shanghai over the next few years.

InterContinental Shanghai National Exhibition & Convention Center 543 rooms

Disneyland Hotel-Luxury 420 rooms

Sofitel Shanghai Macorlink Hotel 360 rooms

Wanda Reign Shanghai 300 rooms

Le Meridien Shanghai Minhang 240 rooms

New notable hotels

Starway Parkview South Station Hotel (70%)

Amenity Garden

The Mosaic Collection Grand Pujian Residence

Rainbow Plaza Shanghai

Notable hotel deals

Bvlgari Shanghai

W Shanghai the Bund

The Shanghai Tower J Hotel

The St. Regis Shanghai Jingan

Edition Shanghai

Upcoming hotels


Tourism

Singapore

Supply

Demand

Outlook

Total visitor arrivals reached a historic high of 16.4 million in 2016, representing an increase of 7.7% compared to 2015. As of YTD February 2017, international visitor arrivals continued an upward trend, increasing 3.4% y-o-y to reach 2.8 million visitors. Continued visitor growth was driven primarily by the stronger showing from Mainland China, which is now the largest source market. This comes as Singapore continues to benefit from the ongoing marketing efforts by the Singapore Tourism Board (STB) in Tier 1 and 2 cities of China, India and Indonesia.

According to STB, Singapore’s room inventory comprised a total of 63,850 licensed rooms in 2016. Approximately 4,456 rooms opened last year, a 7.6% increment over 2015. Majority of the hotel openings were in the Central and Eastern region of Singapore. Major openings in 2016 include the 1,500-room Hotel Boss, 634-room JW Marriott Hotel Singapore South Beach, the 451-room Holiday Inn Express Singapore Katong and the 395-room Mercure Singapore Bugis. So far in 2017, the 37-room Warehouse Hotel has opened. Approximately 2,354 rooms are in the pipeline. Majority of the new supply is in the luxury sector (39.3%) followed by the upscale sector (22.8%).

Note: Singapore Hotels refers to UpscaleSource: STR Global (YTD March 2017), Singapore Tourism Board, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC- Occupancy

As of YTD February 2017, Mainland China was Singapore’s largest source market, contributing 21.4% of total visitor arrivals. Mainland China also registered the largest y-o-y increase of 15.5%. This is followed by Indonesia which contributed to 16.3% of total arrivals. This is mainly the result of improved marketing efforts in these markets, especially in the Tier 1 and 2 cities of China, India and Indonesia. Positive growth in these markets helped offset the decline in visitor arrivals in other key market such as Malaysia, Australia, South Korea and Japan, where currency depreciation and weak economic sentiments have impacted travel demand.

In 2017, STB forecasts zero to moderate growth in visitor arrivals and tourism receipts, targeting visitor arrivals of between 16.4 million and 16.7 million. The larger hotel supply pipeline may impact hotel trading performance in Singapore over the next two years. Ongoing global economic and political uncertainties as well as increasing regional competition will ensure that Singapore remains competitive, particularly in MICE and group business.


OCC ADR RevPAR

16.4 million 2,413 rooms 85.3% SGD 252 SGD 215

Yotel Orchard Road

Andaz Singapore

Park Hotel Farrer Park

Courtyard by Marriott Novena

Upcoming hotels

JW Marriott Hotel Singapore South Beach (Rebranded) 634 rooms

Holiday Inn Express Singapore Katong 451 rooms

Mercure Singapore Bugis 395 rooms

Warehouse Hotel 37 rooms

New notable hotels

Cuscaden Bungalow at 9 Cuscaden Road

Notable hotel deals


Sri Lanka

Shangri-La Hambantota Resort & Spa 300 rooms

Movenpick City Hotel Colombo 219 rooms

ZMAX Fairway Colombo 191 rooms

Ozo Colombo 158 rooms

Anantara Kalutara Resort & Spa 141 rooms


ADR RevPAR


Tourism

Supply

Demand

Outlook

Total international visitor arrivals to Sri Lanka reached 2.1 million in 2016, an increase of 14.0% compared to 2015, falling just short of the target of 2.2 million set by Sri Lanka Tourism. Total tourism revenue reached USD 2.75 billion. As at YTD March 2017, international visitor arrivals to Sri Lanka reached 0.6 million, an increase of 3.4% y-o-y. This is in spite of the closure of Colombo’s Bandaranaike International Airport, which was closed from 6 January 2017 until 6 April 2017 between 08:30 and 16:30 to allow repairs to be made to the runway. The airport reopened on 7 April 2017, resuming full operations. Sri Lanka has set a target of 2.5 million international tourist arrivals in 2017 and a long term goal of 4.2 million by 2020.

According to data provided by the Sri Lanka Tourism Development Authority, the total number of tourist hotel rooms was 19,376 across 354 hotels, up from 18,510 rooms in 334 hotels in 2015. Tourist hotel rooms in Colombo City increased by 9.2% y-o-y in 2015 and account for 20.5% of the total supply of tourist hotel rooms in Sri Lanka. New hotel openings in Sri Lanka in 2016 included the 375-room Shangri-La Resort & Spa Hambantota, the 158-room OZO Colombo and the 141-room Anantara Kalutara Resort and Spa. Recent opening in Colombo include the 219-room Movenpick City Hotel Colombo and the 80-room Jetwing Colombo Seven.

Note: Sri Lanka Hotels refers to MarketwideSource: Sri Lankan Tourism Development Authority (SLTDA), JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

As at YTD March 2017, India remains the top source market for international arrivals to Sri Lanka, making up 14.0% of the total. Arrivals from this market however fell by 1.2% y-o-y. Mainland China is the second largest source market to Sri Lanka, accounting for 13.1% of the total followed by the UK with 9.8% and Germany with 7.0%. Significant growth was seen from Russia, and as at YTD March 2017 arrivals from Russia have grown by 24.6% y-o-y. To realise its tourism potential, Sri Lanka needs to significantly improve its international air and domestic road connectivity, hotel infrastructure and further invest in improving domestic transport, energy and telecom infrastructure.

Improved international connectivity to key source markets such as Mainland China and the Middle East, coupled with improvements in domestic infrastructure and development of the country’s internal road network have helped fuel demand. Sri Lanka’s continued focus as an emerging investment destination will increase project related activities linked to new investment in port and continued infrastructure development, which stimulate hospitality demand across all sectors.

Shangri-La Colombo

Marriott Weligama Resort & Spa

Park Inn by Radisson Colombo

Cinnamon Life Hotel Colombo

Upcoming hotels

New notable hotels

There were no hotel transactions in 2016

Notable hotel deals

OCC


Tourism

Sydney

Supply

Demand

Outlook

In 2016, 37.3 million visitor nights were spent in Sydney City which represents 6.3% of all visitor nights spent in Australia. International visitor nights accounted for 73.1% and domestic nights 26.9%. Domestic visitor nights in Sydney decreased slightly by 1.6% in 2016 to 10.0 million, while international visitor nights fell by 10.8% to 27.3 million.

JLL are aware of five accommodation developments currently under construction in the city centre due for completion between 2017 and 2018. If all projects materialise, this will represent an increase of 1,104 rooms or 6.3% on the existing stock as at 31 December 2016. We note however that in 2016 a net decrease of 338 rooms occurred which will largely offset the supply due to enter the market in the coming years.

Note: Hotel supply within the Sydney City RegionSource: STR Global (YTD March 2017), Tourism Research Australia, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Sydney has benefitted from a combination of a strong corporate and leisure market, a number of major sporting events, and demand outstripping supply growth in terms of rooms built, which has resulted in its robust trading performance.

The outlook for Sydney’s accommodation market remains strong, with a continuation of recent trends anticipated. Both occupancy and ADR are at record levels on a moving annual average basis, with ADR growth expected to further improve in line with the consistent supply outlook and more stable demand environment with growth across a variety of segments including corporate, cruise and inbound. Occupancy is predicted to remain in the high 80% range in the coming years, further strengthening RevPAR. The recent opening of the ICC Sydney in December 2016 will also benefit the market greatly.


OCC ADR RevPAR

2.4 million 816 rooms 91.1% AUD 273 AUD 249

Hyatt Regency (Extension) 209 rooms

Larmont Sydney (Extension) 28 rooms

New notable hotels

Park Regis City Centre

Notable hotel deals

Sofitel Sydney Darling Harbour

Meriton Sydney Sussex Street

Sydney by Crown Suites

Upcoming hotels


TaipeiQuick FactsInternational Visitor Arrivals (2016) Number of New Rooms (2017)

ADR RevPAR

10.7 million 300 rooms 68.0% TWD 7,037 TWD 4,783

CitizenM Ximending

Taipei Royal Golden Tulip Hotel

Fujita Kanko Hotel

Renaissance Hotel

Upcoming hotels

Courtyard Taipei 465 rooms

Amba Taipei Songshan 189 rooms

Grand Mayfull Hotel Taipei 146 rooms

Roaders Hotel Taipei 68 rooms

New notable hotels

Tourism

Supply

Demand

Outlook

According to the latest statistics available, total visitor arrivals to Taiwan in 2016 reached approximately 10.7 million, up 250,494 or 2.4% over the previous year. With Mainland Chinese visitor arrivals declining by 16.1% over the same period, the improvement in total visitor arrivals was predominantly driven by the robust growth in Japanese and Southeast Asia markets.

Some of the notable openings in 2016 included Courtyard Marriot (465 rooms), Amba Taipei Songshan (189 rooms), and Grand Mayfall Hotel Taipei (146 rooms). Looking forward, international hotel openings include CitizenM in Ximending (expected mid 2017), Aloft Taipei in Beitou District (2018) and Taipei Royal Golden Tulip Hotel (2018). The Aloft Hotel Taipei Beitou (292 rooms) opened in early 2017. According to the latest statistics available, as at the end of 2016, a total of 517 hotels with 25,477 rooms were in operation.

Note: Taipei refers to Luxury & Upper Upscale hotelsSource: STR Global (YTD Jan 2017), Taipei Tourism Board, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

Mainland China remains as Taiwan’s largest source market, amounting to 32.9% of total arrivals in 2016. To cover the decline of the Mainland market, the Taiwanese government has been actively promoting its country’s tourism in Japan and several Southeast Asia markets. In September 2016, visa restrictions to Taiwan were eased for citizens of ASEAN nations, and as a result, the Southeast Asia market overall has witnessed a noticeable increase of leisure tourists.

With Mainland China being the main source market for the country, the tourism market is likely to remain challenging if cross-strait tensions continue. To its benefit, Taiwan’s government has been diversifying key source markets to ASEAN nations and Japan. Recent development plans such as the Taipei Sky Tower project are likely to further enhance Taipei’s status as a major tourism destination in Asia.


Notable hotel deals

OCC


Tourism

Tokyo

Supply

Demand

Outlook

A total of 50.9 million visitor nights were spent in Tokyo in 2016, representing 12.3% of all visitor nights across Japan. International accommodation guests, which account for 31.7% of the total had slightly declined by 1.6% y-o-y while domestic accommodation demand fell by 5.9 % y-o-y. While international visitor arrivals to Japan increased by around 22% y-o-y in 2016, demand for internationally-branded hotels has not followed suit. The higher rate of full-service Tokyo hotels is driving business to cheaper nearby cities whilst limited-service remains a preference and Airbnb is definitely impacting.

According to the Japan Ministry of Health, Labour and Welfare, hotel and ryokan supply in Tokyo accounted for 1,891 properties (149,286 rooms) as at March 2016. Just two new luxury products, the first being Hoshinoya Tokyo (84 rooms) and the second The Prince Gallery Tokyo Kioicho (250 rooms) have been added to the market since then. The pipeline in Tokyo overall remains rather benign until the 2020 Summer Olympics.

Note: Tokyo Hotels refers to UpscaleSource: STR Global (YTD March 2017), Japan Tourism Agency, JLLADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

The proliferation of alternative accommodation options such as Airbnb have had an impact on demand for hotels and hostels across Japan but particularly in Tokyo where room rates are highest in the country. Tokyo is most popular during cherry blossom season and Chinese New Year holidays. The introduction of budget carriers into second tier cities of Japan is seeing tourism growth outpace Tokyo. However, for the first two months of 2017, inbound visitation was still up a healthy 15.7% on 2016.

Moving forward, Tokyo hotel trading performance is expected to show further growth but at a slower pace than witnessed over the past two years. Any RevPAR improvement will be driven by ADR increase as occupancy has already peaked in our view and many hotels are operating at full capacity. Full-service hotels in Tokyo have come under some pressure to maintain rate whilst limited-service have enjoyed stronger support because of the appreciation of the JPY making the former more expensive for leisure tourists.

Quick FactsInternational Visitor Arrivals (YTD March 2017) Number of New Rooms (2017)

OCC ADR RevPAR

6.5 million 463 rooms 80.4% JPY 26,648 JPY 21,431

Trunk Hotel

Moxy Tokyo Kinshicho

Upcoming hotels

APA Hotel Sugamo-Ekimae 512 rooms

The Prince Gallery Tokyo Kioicho 250 rooms

APA Hotel Ochanomizu-Ekikita 187 rooms

Oakwood Premier Tokyo 129 rooms

Hoshinoya Tokyo 84 rooms

New notable hotels

There were no hotel transactions in

H2 2016

Notable hotel deals


YangonQuick FactsInternational Visitor Arrivals (Myanmar 2016) Number of New Rooms (2017)

OCC ADR RevPAR

4.4 million 1,691 rooms 55% USD 150 USD 83

Tourism

Supply

Demand

Outlook

Foreign visitor arrivals to Yangon have grown rapidly after cyclone Nargis in 2008 to reach a peak in 2015 at 1.2 million, a 15.5% growth y-o-y. International visitors to Myanmar registered 2.9 million in 2016 under the Ministry for Hotels and Tourism’s revised data collection method to exclude one-day visitors at border crossings. As at YTD February 2017, the nation saw 600,000 international visitors, a 22% growth over the same period in 2016.

While the majority of existing supply in Yangon were hitherto largely unbranded, by 2020 almost 5,000 new rooms are expected to enter the market, much of which will be in the upscale and luxury sector. 2017 alone will see the addition of almost 1,700 keys, all of which will be in the luxury and upscale markets.

Note: Yangon Hotels refers to Five-starSource: Ministry of Hotels & Tourism, JLL EstimatesADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy

With geographical proximity and governmental cooperation, Thailand and Mainland China have consistently remained the top source markets to Myanmar, despite indicative numbers suggesting a slight drop in Chinese arrivals in 2016. Singapore was a key growth market in recent years and the Union Minister for Tourism expects 35% y-o-y growth in 2017 with visa-free travel and a Myanmar roadshow in Singapore late-2016. Based on released statistics, other top source markets in 2015 were Japan at 6.9%, followed by the United States and South Korea at 5.4% and 4.9% respectively.

Yangon is expected to benefit from continued growth in visitor arrivals with the addition of new air routes and airlines, supported by expansion of the Yangon International Airport and the ongoing construction of Hanthawaddy International Airport which will collectively raise capacity to 20 million by 2022. Myanmar also held its first ever International Tourism Expo in Yangon and ran roadshows oversees to emphasis its open door policy. However, the massive influx of room supply, particularly in the luxury and upscale sectors, will take some time to be absorbed which is likely to put further pressure on occupancy and rates in the short to medium term.

Meliá Hotel and Hoang Anh Gia Lai Myanmar Centre 430 rooms

Ibis Styles Yangon Stadium 108 rooms

TRYP by Wyndham Yangon 60 rooms

New notable hotels


Notable hotel deals

Lotte Hotel Yangon

Rose Garden Hotel (Phase 2)

Pan Pacific Yangon

Centrepoint Grand Hotel

Kempinski Yangon

Upcoming hotels


International Visitor Arrivals(Latest Available)

Total Number of New Rooms

(2017)

Occupancy (OCC)

(YTD March 2017)

Average Daily Rate (ADR)

USD(YTD March 2017)

Revenue per Available

Room (RevPAR) USD(YTD March 2017)

AUCKLAND (MARKETWIDE)

3.5 million (NZ 2016) 100 86.6% 132 115

BALI (UPSCALE)

4.9 million(2016) 3892 66.4% 146 97

BANGKOK (UPSCALE)

20.8 million (2016) 2876 86.4% 99 86

BEIJING (FOUR-STAR)

4.2 million (2016) 1479 69.6% 81 56

BRISBANE (MARKETWIDE)

935,000 (2016) 207 71.5% 116 83

DELHI (DELUXE)

8.9 million*(India 2016) 540 83.1% 85 71

HANOI (MARKETWIDE)

4 million (2016) 843 85.2% 113 96

HO CHI MINH CITY (MARKETWIDE)

5.2 million (2016) 1007 75.7% 117 89

HONG KONG (UPSCALE)

56.7 million (2016) 1022 83.7% 226 189

JAKARTA (UPSCALE)

2.4 million(2016) 3193 53.8% 166 89

KUALA LUMPUR (LUXURY & UPSCALE)

26.8 million (Malaysia 2016) 2548 68.7% 121 83

MACAU (MARKETWIDE)

31 million (2016) 3101 85.2% 171 146

MALDIVES (MARKETWIDE)

1.3 million (2016) 1316 69% 843 582

* International Passenger Traffic ** International Accomdation Guests Source: STR Global (YTD March 2017), Various Sources, JLL

Quick Facts Comparison


International Visitor Arrivals(Latest Available)

Total Number of New Rooms

(2017)

Occupancy (OCC)

(YTD March 2017)

Average Daily Rate (ADR)

USD(YTD March 2017)

Revenue per Available

Room (RevPAR) USD(YTD March 2017)

MANILA (MARKETWIDE)

5.9 million(Philippines 2016) 3101 70.6% 107 75

MELBOURNE (MARKETWIDE)

1.7 million (2016) 427 88.3% 166 147

OSAKA (MARKETWIDE)

9.4 million**(2016) 164 78.9% 205 161

PHUKET (MARKETWIDE)

4 million (2016) 950 87.9% 147 129

SEOUL (MIDSCALE & ECONOMY)

17.2 million(South Korea 2016) 1362 71.7% 84 60

SEYCHELLES (MARKETWIDE)

303,000 (2016) 127 75.7% 175 132

SHANGHAI (FOUR-STAR)

8.5 million (2016) 5428 65.8% 81 54

SINGAPORE (UPSCALE)

16.4 million(2016) 2413 85.3% 179 153

SRI LANKA (MARKETWIDE)

2 million (2016) 674 66.4% 111 73

SYDNEY (MARKETWIDE)

2.4 million (2016) 338 91.1% 209 190

TAIPEI (LUXURY & UPSCALE)

10.7 million (Taiwan 2016) 300 68% 228 155

TOKYO (UPSCALE)

2.5 million** (YTD February

2017)334 80.4% 237 190

YANGON (FIVE-STAR)

4.4 million(Myanmar 2016) 1691 55% 150 83

* International Passenger Traffic ** International Accomdation Guests Source: STR Global (YTD March 2017), Various Sources, JLL


Singapore

Bali

AucklandBrisbane

Bangkok

Phuket

Hanoi

Beijing

Shanghai

Hong KongMacauTaipei

Delhi

Ho Chi Minh City

Jakarta

Kuala Lumpur

Manila

Melbourne

OsakaSeoul

Sydney

Tokyo

Yangon

Maldives

Sri Lanka

Seychelles

Asia PacificKey Destinations


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About JLL Hotels & Hospitality Group

Key ContactsCraig CollinsChief Executive Officer

[email protected]

Troy CraigManaging Director Strategic Advisory

[email protected] Pacific

Tom SawayanagiManaging Director

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Frank SorgiovanniHead of Research

[email protected] Pacific

Scott HetheringtonChief Executive Officer

[email protected]

Mike BatchelorManaging Director Investment Sales

[email protected]

Mark DurranManaging Director Investment Sales

[email protected]


www.jll.com/hospitalityJones Lang LaSalle© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

Documents

Hotel Destinations Asia Pacific - Vietnam Business · ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy As of YTD March 2017, Mainland China was Bali’s