Tourism & Hospitality

Transcription

1 Tourism & Hospitality The Juggernaut Rolls on Source: STB Source: STB Vijay Natarajan Vikrant Pandey (65) (65)

2 Where we are? - A Snapshot Visitor Arrivals (m) (%) F 215F Source: STB Growth By Markets Total Visitor Arrivals (LHS) %chg Visitor Arrivals Mode of Transport Land 13% Sea 1% Air 77% Source: STB. Source: STB 1

3 Where do we go from here? - on A Multi-year Tourism Boom Structural Transformation - Visitor arrivals to touch the 17m mark by 215. Asia Pacific region accounted for about 85% of visitor arrivals in 211, up from 8% in 26.Europe accounts for just 1%. Top 5 destinations - Indonesia (2%), China (13%), Malaysia (9%), India (7%) and Australia (7%) - accounted for 55% of total arrivals compared with 5% in 25. Visitor Arrivals By Geography Top 5 Visitor Arrivals Market Growth (%) Asia Oceania Europe America Africa (m) Indonesia Malaysia PR China India Australia As a % of total (%) Source: STB, UOB Kay Hian Source: STB, UOB Kay Hian 2

4 Key Demand Drivers Growth in LCC markets. Singapore s Transformation as Asia s leading MICE, Medical and Gaming destination. International Cruise Terminal. Additional set of attractions coming on-stream. 3

5 LCC Boom Intra-Regional Travel At Affordable Prices LCC passenger traffic growing at a CAGR of 35%, way higher than the 1.4% growth of full-service carriers. Upcoming/Expanding LCCs Market share - LCC grew from just about 5.6% of total passenger traffic to 25.6% in last 5 years. LCC Passenger Traffic vs Total Passenger Traffic LCC Pax Total Pax % Share of Total (%) Source: Changi Airport Group, UOB Kay Hian Source: CDREIT 4

6 Singapore Asia s Leading MICE, Gaming & Medical Tourism Hub Singapore has been ranked the world s top international meetings city for the past five years. Singapore currently ranks 3 rd in the world in terms of gaming with a gross gaming revenue of US$5.7b, just next to Las Vegas US$6.1b. Singapore ranks 2nd in the category of Health and Environment and was one of the top 1 medical travel destinations in 21. Global MICE Market Share(211) Ranking City Number of % of all Meetings Meetings 1 Singapore Brussels Paris Vienna Budapest Barcelona Tokyo Geneva Madrid Berlin Source: UIA Tourist Arrivals Vs. Mass market GGR growth. (%) (%) Q1 4Q1 1Q11 2Q11 Industry Mass Market GGR Growth (LHS) Tourist Arrivals Growth GENS Mass Market GGR Growth Source: Respective companies, UOB Kay Hian 5

7 International Cruise Terminal To Open Up New Vistas ICT will double Singapore s berth capacity from two to four To add 2-4% of visitor arrivals from 213 onwards. Tourism Expenditure Growth ( S $ ) , , Tourism Receipts More Singapore s tourism receipts accounted for about 7% of GDP in 211, up from 4.7% in 29, but is still lower than Hong Kong s 14%, indicating more room for growth. Source: STB, CEIC, UOB Kay Hian Tourism Expenditure Breakdown T o u ris m R e c e ip t s p e r c a p it a (S $ ) 5, 1, 15, 2, Shopping F&B Accomodation Other TR components 6 Source: STB, CEIC, UOB Kay Hian

8 New Attractions To Transform Tourism Landscape Gardens By The Bay. Opening June 212; targets 5m visitors. Key attractions: Flower Dome, Heritage Gardens, Golden & Silver Gardens, Dragonfly Lake, and Bay East Garden. Upcoming/New Attractions River Safari at Mandai(3Q12). First river-themed wildlife park in Asia. Key attractions: Giant Panda, Mekong Giant Catfish and Giant Freshwater Stingray. Source: STB 7

9 Hotel Demand vs. Supply Demand for room nights to increase by an average of 5.8% p.a (historical 1-year CAGR of 4%) to 13.7m room nights between 212 and 214 compared with a supply CAGR of 5%. Hotel room supply to increase to 5,371 rooms by 215, representing an addition of about 2,1 rooms p.a. Demand vs Supply (m) (%) F 215F 5 Demand for Room Nights (LHS) Supply of Room Nights (LHS) Occupancy Source: Changi Airport Group, UOB Kay Hian Supply By Location 3, 2,5 2, 1,5 1, , 212F 213F 214F 215F >215F Orchard Downtown Core Rest of Central Region Fringe Area Sentosa Outside Central Region Source: CBRE,UOB Kay Hian 8

10 Hotel Occupancy and Room Rates Occupancy levels to stay above 85% for Hotel room rates to grow at 5-7%p.a over the next three years. ADR and Occupancy (S$) F 214F Source: STB, UOB Kay Hian ADR RevPAR Occupancy Average Room Rate and Hotel Room Supply (%) Year Occupancy(%)No.of Visitors(m)Visitors Growth(%)ARR(S$)RevPAR(S$) (2) (4) F F F F Source: STB, CEIC, UOB Kay Hian

11 Positive Outlook Among Hotel Operators Healthy participation in state land tenders with bids more than 2.5x minimum reserve price. Latest hotel transactions indicate that the hotel valuation for a typical four-star hotel has increased 1-2% over one year. Recent Land Tenders Tender Price/ Date of Award Location Gross Floor Area Name of Reserve Reserve Price (GFA) Successful Tenderer Tender Price Tender Price Lease Number of Price Ratio (m2) (S$ m) psf/gfa (Years) Bidders (S$m) (x) 23 Apr 12 Rangoon Road 13,4 RB Capital 151 1, Dec 11 Jalan Bukit Merah 22,249 CEL Development Mar 11 Robertson Quay 12,651 Novel Developments Jan 11 Gopeng St 19,416 Golden Development Jan 11 Robinson Road 7,45 Royal Group Holdings 86 1, Source: URA Recent Hotel Transactions Hotel Transaction date Transaction Price (S$m) Number of Rooms Star Rating Price per Room (S$) Park Regis Oct , Paramount Hotel Oct ,22 Saff Hotel Sep ,911 New Cape Inn Aug ,377 New Changi Hotel May ,131 Crowne Plaza Apr , Studio M Mar ,667 Park Regis Aug ,798 Swissotel Merchant Court Mar ,457 Source: CBRE, UOB Kay Hian 1

12 Various Ways To Play Tourism Boom Key Stock Picks Hoteliers CDL Hospitality Trusts (BUY/Target: S$2.), Ascott Residence Trust (BUY/Target: S$1.25) and Global Premium Hotels (NOT RATED) Retailers Starhill Global REIT (BUY/Target: S$.75), FJ Benjamin (BUY/Target: S$.42). Gaming and Casino Operators Genting Singapore (BUY/Target: S$1.89). Medical Tourism Raffles Medical (BUY/Target: S$2.87) and Parkway life REIT (BUY/Target:S$2.5). MRO and Airport Ground Handlers ST Engineering (BUY/Target: S$3.34) and SATS (HOLD/Target: S$2.68). Land Transport ComfortDelGro (BUY/Target: S$1.75) 11

13 Peer Comparison Price Target Upside/ Market Curr Fwd Curr Fwd Book Price/ Hist Net Ticker Rec 26 Jun 12 Price (Downside) Cap. PE PE Yield Yield NAV ps Book ROE Gearing* (S$) (S$) to TP (%) (US$m) (x) (x) (%) (%) (S$) (x) (%) (%) Hotel Sector AscottREIT ART SP BUY CDL Htrust CDREIT SP BUY , Amara Hldgs AMA SP NR.355 n.a. n.a n.a. n.a BanyanTree BTH SP NR.525 n.a. n.a Fragrance FRAG SP NR.48 n.a. n.a. 1,259.6 n.a. n.a. n.a. n.a GuthrieG GUTH SP NR.56 n.a. n.a n.a. n.a. n.a. n.a H Grand Central GRAN SP NR.78 n.a. n.a n.a. n.a. n.a. n.a (5.2) HPL HPL SP NR 1.88 n.a. n.a n.a. n.a. n.a. n.a H Royal HRY SP NR 2.32 n.a. n.a Man Oriental (US$) MAND SP NR 1.3 n.a. n.a. 1, OrchardP OPH SP NR 2.6 n.a. n.a n.a. n.a. n.a. n.a Roxy-Pacific ROXY SP NR.4 n.a. n.a UIC UIC SP NR 2.53 n.a. n.a. 2,723. n.a. n.a. n.a. n.a Global Premium Hotels GPHL SP NR.25 n.a. n.a n.a. n.a. n.a. n.a Simple Average Retail Sector Starhill Gbl SGREIT SP BUY FJ Benjamin FJB SP BUY n.a CapitaMall Trust CT SP BUY , CapitaRChina CRCT SP NR n.a. n.a Fortune Reit (HK$) FRT SP NR 4.52 n.a. n.a. 5, FrasersCT FCT SP BUY , LippoMalls LMRT SP NR.385 n.a. n.a MapletreeCom MCT SP NR.955 n.a. n.a. 1, Simple Average Medical PLife REIT PREIT SP BUY RafflesMG RFMD SP BUY (11.7) Simple Average Gaming Genting SP GENS SP BUY , (3.5) Airport Ground Handler SATS SATS SP HOLD (.7) 2, (21.3) ST Engg STE SP BUY , (29.8) Simple Average Land Transport ComfortDelGro CD SP BUY , SMRT MRT SP SELL (21.4) 1, (5.7) Simple Average Source: Bloomberg, UOB Kay Hian

14 Key Risk Factors Macro economic headwinds resulting in slowdown of global tourism industry. Strengthening S$ making inbound tourism relatively unattractive. Delay in opening of new phase of attractions. Outbreak of disease like SARS, H1N1 etc., 13

15 THANK YOU 14 14

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