Hotels & Hospitality Group | May 2017 Hotel Destinations Asia Pacific 1 Hotel Destinations – Asia Pacific Auckland Quick Facts OCC ADR RevPAR International Visitor Arrivals (NZ 2016) Number of New Rooms (2017) 86.6% NZD 191 NZD 166 3.5 million 663 rooms Tourism Demand New notable hotels Auckland International Airport, which is the Auckland reported an average occupancy ‘gateway’ for Auckland and New Zealand level of 86.6% for the period year ending Jet Inn Extension, overseas visitors, has experienced strong March 2017, the highest occupancy level on Auckland International Airport growth. For the period YTD December record in over 20 years. Auckland’s market 60 rooms 2016, total passenger movements have occupancy has risen every year since 2010, increased 12% with an increase recorded in after reaching a post-GFC low of 69.5% in Swiss-Belsuites Victoria Park domestic passenger movements, up 12.5% 2009. FIT and Corporate business dominate 40 rooms and international passengers increasing the business mix of Auckland hotels by 11.5%. International visitor arrivals to contributing 47.5% and 20.5% of hotel guest New Zealand reached 3.5 million for the nights respectively, y-o-y to March 2017. period year ending February 2017, a 10.7% International sourced guests accounted for Upcoming hotels improvement over the corresponding prior 45% of guest nights sold, while domestic year period. guests accounted for 55%. SKYCITY Hobson Street Hotel Four Points by Sheraton Park Hyatt Auckland M Social Auckland (former Copthorne Hotel Auckland Harbourcity) The Sebel Auckland Manukau Supply Outlook Seven projects (comprising a total of 1,291 We anticipate that Auckland’s rooms) are currently under construction accommodation market will continue to Notable hotel deals and are forecast to enter the market over perform strongly in the short term and is the next two years, with five of the hotel poised for further rate growth and to solidify Ibis Christchurch projects (818 rooms) comprising 5-star recent gains in occupancy levels given the product. The seven new hotel projects current capacity constraints, although Novotel Christchurch represent an approximate 20% increase in ultimately the ‘wave’ of new supply is likely room supply, which is an unprecedented to ease capacity constraints in the medium level of stock. However, as the room term (between 2018 – 2019). Beyond the supply is expected to enter the market in a short term some caution is warranted as staggered manner (over a two to three-year the market begins to absorb the forecast period), this should alleviate some concerns significant levels of room supply, which of an oversupply shock. 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. Note: Auckland Hotels refer to Marketwide Source: Tourism Industry Association, Statistics New Zealand, JLL ADR – Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Hotel Destinations – Asia Pacific 2 Bali Quick Facts OCC ADR RevPAR International Visitor Arrivals (2016) Number of New Rooms (2017) 66.4% USD 146 USD 97 4.9 million 3,892 rooms Tourism Demand Total visitor arrivals were 4.9 million in As of YTD March 2017, Mainland China was New notable hotels 2016, representing an increase of 22.5% Bali’s largest source marketing, contributing compared to 2015. As of YTD March 2017, 29.6% of total visitor arrivals. This is Mövenpick Resort & Spa Jimbaran international visitor arrivals continued followed by Australia contributing 19.8% an upward trend, increasing 22% y-o-y to of total visitor arrivals. Mainland China Wyndham Resort Tamansari Jivva reach 1.3 million visitors. For the full year saw the largest y-o-y increase of 58.6%, Sthala Ubud Bali 2017, the Bali Provincial Tourism Agency underscoring the burgeoning Chinese travel is targeting approximately 40% of the demand in Asia. Despite travel advisories, Sol House Legian targeted 15 million foreign tourist arrivals to most key source markets recorded strong Indonesia in 2017, which is approximately growth in YTD March 2017, suggesting that six million foreign tourists. Strong growth in foreign tourists are largely unfazed and arrivals can be attributed to the extension are increasingly drawn to Bali as premier Upcoming hotels of the visa waiver programme in 2015, as tourism destination. well as the improvement in air connectivity Kempinski Nusa Dua to key source markets such as Greater China Fairfield by Marriott Bali Legian and Australia. The Westin Ubud Resort & Spa Six Senses Bali Supply Outlook Approximately 1,737 rooms opened in Looking forward, visitor arrivals from key Notable hotel deals 2016, representing a 9.8% y-o-y increment. source markets are expected to continue There were no hotel transactions Recent major openings in 2016 include rising. Recent improvements in air in H2 2016 the 136-room Sol House Legian, the 222- connectivity from Ngurah Rai International room Wyndham Resort Tamansari Jivva, Airport with new flight routes, ongoing the 143-room Sthala Ubud Bali and 297- improvements in airport accessibility, and room Mövenpick Resort & Spa Jimbaran. the extension of visa waiver programme In 2017, approximately 3,892 rooms should fuel the continued spike in foreign are in the pipeline. Majority of the new tourism demand in Bali. Moreover, the supply in clustered in the luxury sector recent corporation between Indonesia and (44.3%) followed by the upscale sector Chinese tourism authorities should provide (34.2%). In terms of location, most will be an added boost to Indonesia’s overall concentrated in the Nusa Dua and Uluwatu tourism sector. areas. However, it is not unusual for several projects to be postponed or cancelled due to financing difficulties. Note: Bali Hotels refers to Upscale Source: STR Global (YTD March 2017), Bali Government Tourism Office, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy 3 Hotel Destinations – Asia Pacific Bangkok Quick Facts OCC ADR RevPAR International Visitor Arrivals (2016) Number of New Rooms (2017) 86.4% THB 3,453 THB 2,983 20.8 million 2,876 rooms Tourism Demand New notable hotels Bangkok received 20.8 million international Mainland China remains the biggest source visitors in 2016, representing an increase of market to Bangkok, followed by Japan, Ibis Bangkok IMPACT 7.5% y-o-y, as Bangkok continues to be a India and South Korea. Bangkok has seen 587 rooms top global destination after its resurgence a slowdown in growth in visitor arrivals in 2015 from the prior year’s 2014 political from Mainland China to 5.9% growth y-o-y Grande Centre Point Sukhumvit 55 unrest. The passing of His Majesty King in 2016 from 82.5% growth y-o-y in 2015. 442 rooms Bhumibol Adulyadej resulted in a minor This comes as the government launched dip in arrivals which recovered quickly as a crackdown on zero-dollar tours in ibis Styles Bangkok Sukhumvit 50 businesses return to usual. Record arrivals September, leading a q-o-q drop in Chinese 171 rooms are expected in 2017 as early-year airport arrivals. Key markets which experienced statistics are already indicating growth. strong growth include USA (12.7%), Middle Eastern countries (11.1%) and India (8.2%). Upcoming hotels The Bangkok EDITION by Ritz Carlton Park Hyatt Bangkok Lancaster Bangkok Supply Outlook Notable hotel deals Since the beginning of 2017, approximately Bangkok will continue to see strong growth 800 rooms have been added to the Bangkok in visitor arrivals with ongoing airport Swissotel Nai Lert Park market with another 2,100 rooms estimated expansions to increase capacity from 45 to enter the market by year-end. Over 35% million to 60 million for Suvarnabhumi of future supply over the next four years is Airport, and from 28 million to 40 million concentrated in the upscale segment. Key for Don Mueang Airport. Higher airport new projects include ibis Styles Bangkok capacities are expected to translate to Sukhumvit 50, Grande Centre Point lodging demand and absorb the oncoming Sukhumvit 55, and ibis Bangkok IMPACT on room supply. Chaengwattana Road. Note: Bangkok Hotels refers to Upscale Source: STR Global (YTD March 2017), Tourism Authority of Thailand, Ministry of Tourism and Sports Thailand, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Hotel Destinations – Asia Pacific 4 Beijing Quick Facts OCC ADR RevPAR International Visitor Arrivals (2016) Number of New Rooms (2017) 66.1% RMB 559 RMB 389 4.2 million 1,479 rooms Tourism Demand Data from Beijing’s Tourism Bureau show Beijing’s hotel demand is driven by business New notable hotels the city’s international arrivals dropped travel as well as the tourism and MICE 0.8% y-o-y to 4.2 million at the end of (Meetings, Incentives, Conferences and Grand Metropark Hotel Beijing 2016. Visitors from South Korea and Japan Exhibitions) travel segments. Corporate 427 rooms decreased 8.8% and 4.0% respectively, due demand remains the major demand driver. to their slower economy and economic As Beijing is the political and commercial Grand Metropark Longxi environment. French and German travelers centre in Mainland China, a large number of Conference Center have also trended downwards by 12.3% corporates have set up their headquarters 346 rooms and 2.9% respectively. The recent fall in in Beijing, generating considerable business the euro has led to a decline on business demand. InterContinental Beijing Sanlitun activities with Beijing’s long haul trading 300 rooms partners. Tylfull Hotel 226 rooms Chao Clubhouse 180 rooms Upcoming hotels Supply Outlook Beijing Bvlgari Hotel Just five new hotels opened in Beijing The Beijing market will benefit from in 2016, adding 1,479 rooms to the enhanced intercity transportation and Mandarin Oriental Beijing market.