Hotels & Hospitality Group March Hotel Destinations Asia Pacific

Transcription

1 Hotels & Hospitality Group March 2015 Hotel Destinations Asia Pacific

2 Welcome to the March 2015 edition of our Hotel Destinations Asia Pacific publication, a biannual overview providing a snapshot of key hotel markets around Asia Pacific. As you browse through this guide, you will find a selection of notable hotel trends, recent transactions, upcoming new projects and a summary of key market statistics for each destination. Enjoy the read and look out for the next edition! Scott Hetherington Chief Executive Officer, Asia JLL Hotels & Hospitality Group Craig Collins Chief Executive Officer, Australasia JLL Hotels & Hospitality Group

3 Seychelles Mumbai Delhi Maldives Sri Lanka Yangon Bangkok Phuket Hanoi Jakarta Beijing Singapore Manila Bali Shanghai Taipei Seoul Osaka Melbourne Tokyo Sydney Auckland Hotel Destinations Asia Pacific 03 Contents A Sporting Nation The Rise and Rise of Bali Hong Kong Macau Asia Pacific s Key Destinations 08 Kuala Lumpur Ho Chi Minh 08 City Profiles 10 Hong Kong 11 Macau 12 Singapore 13 Kuala Lumpur 14 Sydney 15 Melbourne 16 Auckland 17 Manila 18 Seoul 19 Taipei 20 Tokyo 21 Osaka 22 Shanghai 23 Beijing 24 Bangkok 25 Phuket 26 Mumbai 27 Delhi 28 Ho Chi Minh City 29 Hanoi 30 Bali 31 Jakarta 32 Yangon 33 Seychelles 34 Maldives 35 Sri Lanka Quick Facts Contributors

4 A Sporting Nation Major sporting events profiting Australia s hotel industry

5 Hotel Destinations Asia Pacific 05 The Cricket World Cup and the Asian Cup are just two major sporting events that have benefited the hotel industry enormously around Australia in the first quarter of The economic benefits are expected to reach in the multi-millions of dollars as more than 100,000 tourists visit Australia amidst nine weeks of sporting action. The expected TV audiences for both the Asian Cup and Cricket World Cup are anticipated to topple more than two billion, therefore exposing Australia to new potential tourists. That s on top of the recently completed Australian Open (tennis), the forthcoming F1, Super Rugby and the domestic AFL and NRL seasons about to kick off. With events played around the country, hotels of all shapes and sizes can count on an increase in guests and therefore extend an opportunity to promote their customer loyalty programmes. Tourism Research Australia s (TRA) International and National Visitor Survey reports, released in December, reveals that international visitors grew at 8% over the year-to-date September, the fastest growing rate in a decade, while domestic visitor nights rose by 7% for the same period, the fastest growth rate in two decades. But Australian hotels shouldn t be relying on international sporting events hitting our shores or fluctuations in our currency to boost accommodation numbers and revenue per room. Hotel operators recognise the need for building brand loyalty so that no matter what is happening in Australia, people will always choose to stay at their hotels. Ross Beardsell, Senior Vice President - Strategic Advisory, JLL Hotels & Hospitality Group, said. Successful brand loyalty programmes combined with innovative marketing of services to individuals and corporate groups can ensure that hotels are always growing an increased share of business. Furthermore, by establishing strong brand loyalty relationships with frequent individual travellers, combined with corporates who are looking to stage conferences, events and meetings, hotel operators can gain great reward from the services they offer, and moreover increase owner s returns. Hotel operators recognise the need for building brand loyalty so that no matter what is happening in Australia, people will always choose to stay at their hotels, Ross Beardsell, Senior Vice President Strategic Advisory, JLL Hotels & Hospitality Group Most people are conservative by nature and would prefer to stay somewhere that they know and can trust, so if hotel operators can establish a strong rapport with any frequent individual travellers and corporate groups they should grow their market share accordingly. Combined with a falling Australian dollar, TRA forecasts a continued increase in tourism in 2015 and beyond, with Chinese tourists becoming the most lucrative, spending more and staying longer, than any other international tourist. A lower Australian dollar also encourages locals to travel more domestically. There are many positives for the hotel industry in the future, Mr Beardsell says. Every hotel in Australia can market their additional services to increase additional spend from their visitors, whether they be local or international. Hotels can tailor packages to individual and corporate needs that will not only increase brand loyalty but also their occupancy rates. Mr Beardsell said. Now is the time to capitalise on growing visitor numbers.

6 The Rise and Rise of Bali Bali s hospitality sector is booming, tourism is rising and Bali s future success seems assured

7 Hotel Destinations Asia Pacific 07 In many ways, Bali is the holiday destination that has it all. Feted for its immense beauty and deep-rooted Hindu/Animist culture, the little island near the geographical heart of the Indonesian archipelago attracts a steady flowing stream of visitors looking to sample its heady ambrosia. From thrill-seeking surfers in hunt of the perfect break and nightlife enthusiast enticed by the island s many beach clubs and bars to more cerebral types in quest of stimulation for the body and mind in bohemian hubs such as Ubud, Indonesia s premier tourist draw satisfies all sorts. There are few destinations that can cater quite so capably for such a wide range of demographics, agrees Djodi Trisusanto, Chief Representative for Hotel Development in Indonesia for Marriott International. Those who like nightlife, beaches and shopping can opt for Kuta, Legian and Seminyak. Nusa Dua is better for families due to its host of kid-friendly resorts. Ubud is a cultural destination with some fantastic resorts while the rest of island offers everything from river rafting to hiking. Quite simply, there s something for everyone. There s certainly no denying the variety of experiences that Bali can offer. Historically much of the development has been focused on South Bali. This part of the island is home to the buzzing beach enclaves of Seminyak, Legian and Kuta as well as quieter, higher-end destinations such as Sanur and Nusa Dua. Further north, the town of Ubud is recognized as the spiritual home of Balinese culture. Yet, outside these main tourist areas, the island remains largely untouched, with fantastic scenery, excellent beaches and cultural attractions to spare. This extra scope for development means that saturation point outside South Bali remains a long way off. Given its wide-ranging appeal it is no surprise that the so-called Island of the Gods continues to witness extraordinary growth in popularity. In, international visitors arriving via the island s Ngurah Rai airport rose to 3.73 million, an increase of 15% from the previous year. With Indonesian visitor numbers up 12% to a total of 6.05 million in, it is clear that Bali s magnetic qualities are as compelling to a domestic audience as they are to those from abroad. Indonesia s tourism authorities have ambitious plans to grow the country s international visitor numbers to 20 million by 2020 from a current figure of approximately 9 million. And experts believe that Bali the undisputed jewel in the nation s tourism crown will be key to realizing these aspirations. Although Indonesia can still be considered an emerging economy, many investors now consider Bali hotel real estate to be an established investment, states Adam Bury, Vice President - Investment Sales Asia at JLL Hotels & Hospitality Group. An apt comparison would be Phuket in Thailand, which also has a well-established brand, developed infrastructure and an impressive portfolio of properties from ultra-luxurious to more affordable options. Bali is rightly seen as very solid bet, continues Bury. Rules for investment are relatively transparent compared to other countries in the region and the Indonesian government is highly supportive of further growth. Bali s infrastructure has improved significantly in recent years with major achievements including the refurbishment of the international airport and the construction of the Bali Mandara toll road, linking Kuta with Nusa There are few destinations that can cater quite so capably for such a wide range of demographics Djodi Trisusanto Chief Representative for Hotel Development in Indonesia, Marriott International Dua. However, with visitor numbers set to boom, the completion of even further new infrastructure projects is seen as being key to Bali s continued success. Construction of a new international airport in the north of the island has been green-lighted by the authorities. Approval has also been granted for the improvement of roads linking South Bali and the capital Denpasar to East, West and North Bali a move seen as the most essential requirement to harnessing the untapped potential for development in the remoter areas of the island. The Indonesian government has a good record for putting its money where its mouth is as far as developing infrastructure in Bali is concerned, comments Dan Miller, Head of the Bali Office for JLL. It stepped in to expand the airport and build new roads ahead of the APEC conference in Bali in 2013 and if tourist numbers continue to rise at the current rate, further improvements will have to be made. One of the ways in which we can see Bali evolving is as a base for a multi-destination holiday in this part of Indonesia. Visitors would arrive and depart from Bali as a principal gateway to explore Indonesia, and use it as a jumping off point to neighboring islands such as Java, Lombok, Sumba, Flores, and Raja Ampat. The idea is to market the areas within a 1-2 hour flight time as Greater Bali. If that tactic is to be a success, there needs to be significant improvements in the marine tourism and transportation segments, which is also receiving substantial support from the current administration. Accessibility to the myriad of islands and diversity which Indonesia has to offer will be its ultimate driver for success in sustainable tourism growth. Yet while infrastructural challenges such as road access and occasional water and electricity shortages remain, Bali s future success seems assured. This is also reflected by a host of new air routes linking the island to Mainland China and the Middle East. Meanwhile, as of January 2015, visafree entry is now granted to nationals from Japan, South Korea, Mainland China and Russia, a sign of the government s desire to grow new markets beyond Bali s traditional base of Australian tourists, who constituted 25% of international arrivals in. Bali is maturing as a destination and the hotel market is maturing also, adds Miller. Previously there was not a whole lot of trading, but now property owners are considering selling at reasonable market values. Ally this with the variety on offer and Bali s dynamism as a destination and it is clear there is plenty of scope for further growth.

8 08 Hotel Destinations Asia Pacific Asia Pacific s Key Destinations Beijing Shanghai Seoul Osaka Tokyo Delhi Taipei Mumbai Yangon Hanoi Hong Kong Macau Maldives Sri Lanka Bangkok Phuket Kuala Lumpur Ho Chi Minh Singapore Manila Seychelles Jakarta Bali Sydney Melbourne Auckland

9 Hotel Destinations Asia Pacific 09 Across Asia Pacific in USD 7.5 BILLION in hotel transactions 146 DEALS throughout the region Asia Pacific Top 10 Single Asset Transactions in Key Metrics RANK HOTEL CITY COUNTRY PRICE (USD) PRICE / KEY (USD) 1 Sheraton on the Park Sydney Australia million 714, Marriott Executive Apartments Tomorrow Square Shanghai China million 1,631,742 Shanghai JC Mandarin Hotel Shanghai China million 659,300 Tokyo Bay Maihama Hotel Club Resort Tokyo Japan 343 million 487,909 5 Sofitel Sydney ICC Sydney Australia million 536,587 6 Sofitel Sydney Wentworth Sydney Australia million 437,959 7 Mercure Tokyo Ginza Tokyo Japan million 565,365 8 Hilton Hua Hin Resort Hua Hin Thailand 98.7 million 331,168 9 Park Hyatt Melbourne Australia 94.1 million 392, Sheraton Noosa Resort & Spa Noosa Heads Australia 90.5 million 514,125 Number of keys traded: 34,000 Average price per key: USD 221,000 Cross-borded transactions: 2/3 of all deals were cross border Source: JLL Note: Only arm s length transactions considered

10 10 Hotel Destinations Asia Pacific Hong Kong Hong Kong is much more than a harbour city. The traveller weary of its crowded streets should not forget that this territory with its cloudy mountains and rocky islands is mostly a rural landscape. The popularity with inbound visitors from the Mainland continues to drive Hong Kong s hotel pipeline with recent government forecasts suggesting a necessary doubling of hotel room numbers in the coming decade. Hong Kong has long been a gateway between East and West and the result is an intoxicating mix of Chinese and Western history, commerce, culture and cuisine. The hospitality scene is equally dynamic from luxury hotels within skyscrapers to smaller midscale options and boutiques. Despite political unrest, total visitor arrivals in increased 12.0% y-o-y to reach 60.8 million. Mainland China remained the largest source market (78% of total visitor arrivals) growing 16.0% y-o-y. Short haul markets grew and long haul markets declined, both by marginally below 0.1%. Hong Kong is an attractive leisure destination due to its numerous shopping and entertainment options. As a leading financial centre, corporate travel is another major demand generator for Hong Kong due to the favourable business environment and close proximity to Mainland China. Approximately 2,553 are expected to enter the market in As at the end of, Hong Kong had 230 hotels comprising 71,767. 1,750 new hotel were opened throughout the year and consisted of a mix of international and independent operators. Mainland Chinese demand has diversified, shifting away from midscale and budget tour groups towards more high-end leisure and corporate travellers. Performance outlook is expected to remain stable, with marginal improvements to ADR and occupancy supported by demand from leisure, corporate, and MICE as well as the return of tour groups. Mercer by Kosmopolito HKD 545 million Printemp Hotel Apartment HKD 340 million 548 Dorsett Tsuen Wan Hotel iclub Fortress Hill Hotel iclub Sheung Wan Hotel Ovolo Hotel Southside Somerset Victoria Park Hong Kong Hotel sáv Best Western Hotel Emperor Hotel The Kush Hotel Holiday Inn Express Mongkok 60.8 million Arrivals 1,750 Note: Hong Kong Hotels refers to Luxury stock only. Source: STR Global (YTD December ), Hong Kong Tourism Board, JLL ADR - Average daily rate, RevPAR - Revenue per available room 78.5% HKD 3,689 HKD 2,896

11 Hotel Destinations Asia Pacific 11 Macau Take a stroll along the cobbled streets of today s Macau, and you will find European influences interspersed with its Chinese heritage. This is due to the Portuguese traders who established a settlement in Macau during the 16th century, and subsequently administered the region for over 400 years. Since the handover in 1999, the Macau government shortly liberalised gambling licenses in 2001, stimulating the launch of several gaming investment projects after the issue of three licenses in Before the opening of Macau s very first foreign-funded casino in 2004, Macau only held 9,000 hotel. Today it nears 30,000. Total visitor arrivals in reached a record high of 31.5 million, representing a 7.5% increase y-o-y driven by Macau s primary source market Mainland China. 54% of total visitor arrivals were sameday. The average length of stay in remained on par with 2013 at 0.9 day. Macau s top three source markets were Mainland China, Hong Kong and Taiwan, together contributing around 90% of total visitor arrivals. For the year, visitors from Mainland China rose by 14% y-o-y, while those from Hong Kong and Taiwan decreased by 5%. While there were no hotel openings in, the 200-room Crowne Plaza Macau opened early this year. In the next three to five years, there are a significant number of hotel scheduled for completion, with around 12,000 confirmed hotel in the pipeline. Macau s gambling revenue dropped in, the first time in twelve years. Rather than relying heavily on gambling revenue going forward, the government will diversify Macau s economy by developing the city into a major tourist destination. The focus on tourism along with improved relations with Mainland China is expected to benefit the hotel market. There were no hotel transactions in 200 Crowne Plaza Macau JW Marriott Macau St Regis Macau Cotai Central Hollywood Roosevelt Macau Ritz Carlton Macau Ascott Macau 31.5 million Arrivals None Note: Macau Hotels refers to Luxury stock only. Source: STR Global (YTD December ), Macau Government Tourist Office, JLL ADR - Average daily rate, RevPAR - Revenue per available room 90.6% MOP 1,721 MOP 1,559

12 12 Hotel Destinations Asia Pacific Singapore Ranked by the World Economic Forum as Asia s best tourism and aviation hub, Singapore is poised to capitalise on the region s booming tourism industry. Asian travellers are projected to account for at least half of global tourism expenditure by 2020 and Singapore s combination of leisure, retail and business opportunities is sure to guarantee the Lion State more than its fair share of the growth. The city state s hotel market peaked in 2013 with the sale of Grand Park Orchard hotel and Knightsbridge retail, the city s largest single asset sale, which pushed transaction volumes to more than 10 times those recorded in International visitor arrivals to Singapore shrunk to 15.1 million in, a 3.1% decline over 2013 and failing to achieve the forecast of 16.3 to 16.8 million arrivals set by the Singapore Tourism Board (STB). This marks the first time since 2009 that visitor arrivals to Singapore have fallen. According to the Singapore Tourism Board (STB), Mainland Chinese visitor arrivals, the second largest source market for Singapore, faced a 25.4% y-o-y decline as at November. This was primarily due to a spate of negative events in the South East region, including the disappearance of Malaysia Airlines flight MH370, political tensions in Thailand and anti-china demonstrations in Vietnam. The 502-room Hotel Jen Orchardgateway, which opened in September, was the first ever Jen branded hotel to debut in the world. Shangri-La International Hotel Management Ltd also announced the rebranding of the Traders Hotel on Cuscaden Road to Hotel Jen Singapore. This brings the total number of Hotel Jen room keys in Singapore to over The STB acknowledges that its 2015 target of 17 million visitors (set in 2004) - will probably not be met this year as the uncertain global economy and currency volatility looks likely to impact tourism. STB will also aim to ramp up marketing efforts in major tourism markets to drive demand, targeting secondary cities in China and Indonesia, and marketing Singapore as a solo destination to decrease dependency on multi-tour destination travellers. Hotel Grand Chancellor SGD 248 million 502 Hotel Jen Orchardgateway Holiday Inn Express Clarke Quay Parc Sovereign Hotel Tyrwhitt One Farrer Hotel & Spa Sofitel So Singapore South Beach Hotel & Club Jurong Lake Hotel Hotel Grand Chancellor Orchard Park Hotel Alexandra Midlink Hotel 15.1 million Arrivals 1,773 Note: Singapore Hotels refers to Luxury stock only. Source: STR Global (YTD December ), Singapore Tourism Board, JLL ADR - Average daily rate, RevPAR - Revenue per available room 80.3% SGD 410 SGD 329

13 Hotel Destinations Asia Pacific 13 Kuala Lumpur Kuala Lumpur is an endearing contradiction, from its colonial and Moorish buildings to grand Western-styled shopping malls and office towers. The city is helped by its relatively low cost Trip Advisor in 2013 ranked it the seventh least expensive of major world cities for a night out as well as its Islamic heritage which draws visitors from across the Muslim world. Kuala Lumpur has faced many tourism challenges in but will continue to lift demand along with the growth of its low cost carrier network, which will further develop the city as a global tourism and aviation hub. Kuala Lumpur, the capital city of Malaysia, is predominantly a corporate market with strong weekday business and relatively limited leisure demand, except for weekends. Malaysia has moved up in the global business rankings from 12th to 6th position, according to the World Bank s Doing Business Report which assesses the ease of conducting business in the country. According to Tourism Malaysia, international visitor arrivals reached 25.7 million in 2013, representing growth of 2.7% y-o-y. Despite the negativity surrounding the country s national airline carrier and the consequential fall in inbound Chinese travellers, international visitor arrivals continue to grow. YTD October was 22.9 million (up 9.6% y-o-y). Additions to hotel supply were limited in with 739 hotel and 160 serviced apartment units opening in the city. The majority of the new supply is focused in KL Sentral and KLCC (the Golden Triangle). JLL forecast that around 4,700 hotel and 1,700 serviced residence units are likely to enter the market from 2015 to Tourism Malaysia is trying to recover Mainland Chinese arrivals, sourcing marketing partnerships with airlines and working with outbound operators to arrange for chartered flights. The intention is to offer more direct flights to Kuala Lumpur and secondary destinations such as Penang, Langkawi and Kota Kinabalu. There were no hotel transactions in 445 Fraser Residence St. Regis D Majestic by Swiss Garden Ritz Carlton Residences Four Seasons Place Mövenpick Hotel & Convention Centre KLIA 22.9 million Arrivals (YTD October ) 739 Note: Kuala Lumpur Hotels refers to Luxury & Upscale stock only. Source: STR Global (YTD December ), Malaysia Tourism Board, JLL ADR- Average daily rate, RevPAR - Revenue per available room 73.3% MYR 492 MYR 360

14 14 Hotel Destinations Asia Pacific Sydney Sydney is the major gateway to Australia and a key hub for the Asia Pacific region. Famous for its harbour, the city offers extensive shopping, entertainment and dining experiences as well as countless surf beaches within the wider metropolitan area. The city also boasts a large domestic visitor segment, being both the primary corporate centre in Australia and key leisure destination. This broad demand base will therefore underpin the city s hotel and tourism market in the coming years whereas major infrastructure projects such as the Barangaroo urban renewal project and the development of the Sydney International Convention and Exhibition Precinct will provide an added boost to the market over the medium to long term. International visitor nights to Sydney reached 22.6 million YTD September, recording a 5.6% improvement over the same period in This was in line with international visitors increasing by 8% over the same period to 1.6 million visitors. According to Tourism Research Australia (TRA), China was the most prominent source of visitor night demand (14.2%) despite an 8.6% decline over YTD September. In terms of overall visitor night demand, China was followed by the United Kingdom (12.7%), Korea (5.8%) and Taiwan (5.2%). Source markets with the strongest growth were Malaysia (47.1%), Taiwan (46.5%) and Hong Kong (45.9%), whilst significant decreases were seen from the United States of America (-25.8%) and Korea (-17.6%) No new hotels opened in Sydney during H2. No new hotels opened in Sydney City throughout, with only an extension of Swissotel Sydney (ten ) and Base Backpackers (three ) completed. The outlook for Sydney s accommodation market remains strong following the recovery which has been evident over the past four years. levels have reverted to a very high level and ADR growth is strengthening in line with the benign supply outlook and more stable demand environment, with growth across a variety of segments including corporate, cruise and inbound. Sheraton on the Park, Sydney AUD million Sofitel Sydney ICC Hotel AUD million Sofitel Sydney Wentworth AUD million Hotel 1888 AUD 32.8 million Blue Sydney AUD 32.0 million Tankstream Hotel 57 Hotel Old Clare Hotel 22.6 million Arrivals (YTD September ) None Source: STR Global (YTD December ), Tourism Research Australia, JLL ADR - Average daily rate, RevPAR - Revenue per available room 87.1% AUD 228 AUD 198

15 Hotel Destinations Asia Pacific 15 Melbourne Melbourne is Australia s second most populous city and a major corporate centre notably the financial, manufacturing, education and logistics industries. Melbourne is renowned for its extensive annual calendar of festivals, exhibitions and major sporting events. Increased domestic and international visitation, as well as investment in tourism, convention and sporting infrastructure has underpinned investor confidence and Melbourne has emerged as Australia s accommodation development hot spot over the past ten years. Melbourne has the newest and largest Convention and Exhibition facility in Australia following the opening of the Melbourne Convention and Exhibition Centre (MCEC) in International visitor nights to Melbourne City reached 14.8 million in the year to date September, recording a 4.2% improvement over the same period in This was in line with international visitors increasing by 11.4% over the same period to one million visitors. According to Tourism Research Australia (TRA), China was the most prominent source of visitor night demand (22.1%) with a substantial 23.9% increase in visitor nights over the YTD September. In terms of overall visitor night demand, China was followed by the United Kingdom (9.2%), Korea (5.6%) and Malaysia (5.6%). In relation to growth, the source markets that increased most rapidly were Germany (73.3%), Thailand (47.1%) and Canada (39.9%), whilst the most significant decreases were seen from Japan (-50.3%), Indonesia (-22.6%) and Taiwan (-21.0%). Four hotels opened in Melbourne City throughout, comprising the Wyndham on William (200 ), Sheraton Melbourne (174 ), Oaks Pinnacle (37 ) and the Coppersmith Boutique Hotel (15 ). The medium term outlook for Melbourne s accommodation market remains positive after trading results show continual RevPAR growth over the twelve months to December. RevPAR growth is expected to remain robust over the next few years with the city expected to increase its share of national MICE demand following the closure of the Sydney Convention and Exhibition Centre in late Park Hyatt Melbourne AUD million Oaks on Lonsdale AUD 65.0 million Ibis Styles Kingsgate AUD 30.0 million The Albany Hotel AUD 16.4 million Parade Inn Parkville AUD million Hotel Sophia (extension) 200 Wyndham on William 14.8 million Arrivals (YTD September ) % 15 Sheraton Melbourne Oaks Pinnacle Coppersmith Boutique Hotel AUD 197 AUD 169 Source: STR Global (YTD Dec ), Tourism Research Australia, JLL ADR - Average daily rate, RevPAR - Revenue per available room

16 16 Hotel Destinations Asia Pacific Auckland Auckland is New Zealand s largest and most populous city, situated in the upper half of the North Island. It is centred between two harbours, surrounded by 48 volcanic cones and borders the rainforest hills of the Waitakere and Hunua Ranges. Auckland is renowned for being a multi-cultural city and is often referred to as the City of Sails due to the popularity of sailing in the region and the dominant feature of Westhaven Marina on the city s skyline. Media have reported that SkyCity Entertainment Group has acquired the necessary CBD land for the New Zealand International Convention Centre across the road from its Auckland casino and that final design plans for the NZICC are expected to be publicly unveiled later this year. Construction of the NZICC is expected to be completed by late International visitor arrivals to New Zealand reached 2.85 million in, a 5.1% improvement over Over the past five years (2009 to ), international visitor arrivals to New Zealand have recorded compound average growth of 3.1% per annum. Over the past five years, Auckland s accommodation market has recorded strong RevPAR growth, increasing on average by 5.3% per annum, with modest gains in ADR averaging 1.5% per annum and occupancy rising from circa 70% in 2009 to over 80% in. Auckland reported occupancy levels of 82.2% in, the highest level on record in over 15 years. In, ADR improved by 5.1% to NZD 147 resulting in revenue per available room (RevPAR) growth of 9.7% to NZD 121. A 73 room extension to the existing 125-room Ibis Budget Auckland Airport Hotel completed during Q4 and an 80-room VR Queen Street Hotel opened in May. Two hotels are currently under construction, namely the conversion of the Reserve Bank office building into a 130-room, five-star Sofitel, which is scheduled to open in Q and in Manukau (South Auckland), construction is well advanced for a 152- room hotel which will be independently operated and form part of the wider South Auckland/ Auckland International Airport competitive set. We expect the continuation of the balanced demand/ supply fundamentals. The sound domestic economy and Auckland s ongoing ability to capture its fair share of the forecast growth in international visitors is expected to continue into the foreseeable future. These are seen as the main factors which will continue to drive Auckland s hotel accommodation market. Hotel Grand Chancellor Auckland Airport NZD 23.3 million VR Queen Street Hotel Ibis Budget Auckland Airport addition Lakewood Court Sofitel So 2.8 million Arrivals % NZD 147 NZD 121 Source: NZHC (YTD December ), Statistics New Zealand, JLL ADR - Average daily rate, RevPAR - Revenue per available room

17 Hotel Destinations Asia Pacific 17 Manila In the heart of an archipelago of over 7,000 islands, the bustling city of Manila has emerged as a rising regional economic powerhouse, a growing destination for multinational corporations and a flourishing hospitality market with several exciting prospects in the pipeline. The main hospitality project which is set to be completed in 2018 is Manila s very own integrated gambling and entertainment strip know as Entertainment City. Fashioned on the infamous Las Vegas Strip, Entertainment City will showcase a diverse range of world class facilities, integrated resorts, luxury hotels, state of the art theatres, celebrity-chef-themed restaurants, shopping malls and convention halls. Once completed, this hospitality complex is expected to reach over 10,000. According to the Department of Tourism Philippines, international visitor arrivals to the Philippines were recorded at 2.7 million at YTD July, achieving a 2.4% growth over YTD July South Korea remained the top source market to the Philippines during YTD July, with a 24.2% share of visitors. However, this represented a 6.3% decrease over the same period last year. The majority of the top ten source markets to the Philippines registered improvements, in particular Mainland China showed a significant 8.5% improvement during YTD July with the launch of more direct and chartered flights as well as growing cruise itineraries. The supply pipeline in Manila is expected to show significant growth with approximately 6,000 from to 2018 with the penetration of many international hotel brands alongside the entry of gaming developments namely Solaire Resort & Casino Manila (2013), City of Dreams Manila, Manila Bay Resort and Resorts World Manila Bayshore. The Department of Tourism Philippines is aiming for ten million international visitors by The upcoming pipeline of international branded hotels in the next few years is also expected to boost tourism demand for Manila and the Philippines. Along with this, the Department of Tourism is launching its Visit the Philippines Year 2015 campaign which should draw more visitors. There were no hotel transactions in 365 City of Dreams Hyatt Mercure Manila Ortigas Novotel Manila Araneta Radisson Hotel Manila Bay Jin Jiang Inn Ortigas Jin Jiang Inn Greenbelt 2.7 million Arrivals (YTD July ) 2, % Note: Manila Hotels refers to Marketwide hotels. Source: STR Global (YTD December ), Department of Tourism Philippines, JLL. ADR Average daily rate, RevPAR Revenue per available room. PHP 5,592 PHP 3,767

18 18 Hotel Destinations Asia Pacific Seoul As South Korea s political, economic and financial hub, Seoul is a bustling metropolitan city in Asia. With its rich heritage and traditions, scenic landscapes and modern infrastructure, Seoul is a major corporate and leisure destination, offering tourists a diverse mix of cultural, entertainment, dining and retail experiences. There has been a significant increase in hotel development against a backdrop of demand growth and limited room supply in recent years. International visitor arrivals to South Korea recorded a 16.6% growth to 14.2 million in. All major source markets registered improvements in visitation apart from Japan which reflected a 17.0% y-o-y decline in, primarily due to the depreciation of the Japanese Yen and territorial issues between Japan and South Korea which affected outbound travel from Japan. Visitation from the Mainland Chinese market remains robust, showing a y-o-y growth of 41.6% in and accounting for 43.1% of all arrivals to South Korea. Regional source markets also recorded strong growth including Hong Kong (+39.4% y-o-y), Thailand (+25.2% y-o-y), Taiwan (+18.2% y-o-y) and Malaysia (+17.7%). In, 1,665 new hotel entered the Seoul market. New supply comprised both domestic and international brands. Lotte and Shilla continue to expand their presence in Seoul with the addition of the Lotte Hotel City Guro and Shilla Stay Yeoksam. The majority of the new hotel supply features economy and midscale brands such as Ibis, Aloft and Ramada Encore. Moving forward, visitor arrivals are expected to continue on the upward trajectory, particularly regional visitors and Mainland Chinese. South Korea s diverse tourism offerings including historical sights, medical tourism, MICE and corporate travel remain the key demand drivers. The influence from the Korean Wave and easing of visa regulations for major source markets will also encourage visitation. Seoul Stars Hotel KRW 42.9 billion 306 Shilla Stay Yeoksam Lotte Hotel City Guro Dormy Inn Premium Seoul Garosugil Ramada Encore Seoul Dongdaemun Ibis budget Ambassador Seoul Dongdaemun Ibis Styles Ambassador Seoul Myeongdong Four Seasons Seoul 14.2 million Arrivals 1, % KRW 202,054 KRW 157,756 Note: Seoul Hotels refers to Marketwide Hotels. Source: STR Global (YTD December ), Korean Ministry of Culture, Sports and Tourism, JLL ADR - Average daily rate, RevPAR - Revenue per available room

19 Hotel Destinations Asia Pacific 19 Taipei Taipei has been labelled as the emporium without end. Its main shopping area can be divided into two districts: East and West. West Taipei is the old city and is characterised by narrow streets packed with small traders. The Western district is home to most government buildings and the Taipei Main Station. East Taipei boasts wide treelined boulevards and the city s four main shopping malls. Popular shopping destinations in East Taipei consist of the area around the ZhongXiao-DunHua intersection and Taipei 101. Mainland China continued to be the main contributor to growth in visitor arrivals by overall share (up 38.2% from last year), however South Korea outpaced Mainland Chinese growth at 56.2%. Taipei also acts as a gateway to Taichung and Kaohsiung, providing an impetus for upscale hotel developers to build in anticipation for the increase in room demand over the long term. As at YTD December, visitors to Taipei (measured by arrivals to Taoyuan and Songshan International Airports) increased by 24.2% to nine million visitor arrivals over the same period last year. This indicates arrivals to Taipei are mirroring the rest of the country s rapid growth in arrivals, particularly from Mainland China. In the near future, large supply growth is imminent as tourist arrivals increase at the fast pace realised. Since the recent opening of the W Hotel Taipei and Le Méridien in 2012 and the impressive Mandarin Oriental last year, Taipei is becoming a mecca for upscale and luxury branded hotel development with a pipeline of 2,000 over the next three years. The Tourism Bureau has been successful in its marketing campaigns by targeting visitors within Asia, although it is uncertain if this pace of growth will be sustainable in the medium term. However, in November Taiwan achieved its target of nine million visitor arrivals. Importantly, the overdue Taoyuan International Airport MRT is expected to commence service by the end of the year. There were no hotel transactions in 90 Amba Taipei Zhongshan Farglory Taipei Dome Complex Taipei Marriott Courtyard by Marriott CitizenM Taipei 9.0 million Arrivals (YTD November ) 803 Note: Taipei Hotels refers to Luxury & Upper Upscale stock only. Source: STR Global (YTD December ), Dept. of Information and Tourism, JLL ADR - Average daily rate, RevPAR - Revenue per available room 67.3% TWD 7,585 TWD 5,108

20 20 Hotel Destinations Asia Pacific Tokyo The 2020 Summer Olympic Games is set to bring a flood of tourism not only for the host city, but for the country. Tokyo s hotel sector is entering an exciting new chapter. Japan s economic revival is also providing a boost, with the depreciation of the Yen prompting a surge of international inbound arrivals and an expanding domestic economy driving renewed growth in corporate and leisure travel. Even after the athletes have checked out in 2020, the world s most populous metropolis will continue to offer a seemingly endless variety of culture, dining, entertainment and fashion, with the usual Olympic legacy of new and improved infrastructure. According to the Japan National Tourism Organization (JNTO), visitor arrivals to Japan reached approximately 13.4 million in. The number of inbound tourists in surpassed the yearly total history record of 10.4 million achieved in The high number of inbound tourists, as well as the increasing number of domestic accommodation guests due to the Japanese economic recovery had a positive impact on the Tokyo hotel market. International accommodation guests, who account for approximately 25% of total accommodation demand in Tokyo, reached an estimated 8.7 million as at YTD September, registering year-on-year growth of 25%. On the other hand, the number of domestic accommodation guests declined by 4.1% from the previous year to 26.6 million. According to Japan Ministry of Health, Labour and Welfare, hotel supply in Tokyo comprised 680 hotels (97,879 ) as at March, representing an increase of 2.1% in room supply from Over the second half of, the 84-room Aman Tokyo opened its doors. In order to achieve its goal of 20 million international visitors to Japan by 2020, the government has announced several initiatives and strategies such as improved accessibility for foreign visitors. The above mentioned strategies and the weakened Japanese Yen will continue to further support the increasing inbound demand and hotel trading performances are expected to improve. RevPAR growth in the short term is likely to be driven by a rising ADR. Mercure Tokyo Ginza Undisclosed Tokyo Bay Maihama Hotel Club Resort Undisclosed Hotel Unizo Ginza Itchome JPY 9.5 billion Best Western Shinjuku Astina Hotel Tokyo JPY 8 billion There are no known hotels for Tokyo in ANDAZ Tokyo 8.7million Arrivals (YTD Septembe ) 84 AMAN Tokyo 248 Note: Tokyo Hotels refers to Luxury stock only, unless otherwise stated. Source: STR Global (YTD September ), Japan Tourism Agency, JLL ADR - Average daily rate, RevPAR - Revenue per available room 82.8% JPY 46,005 JPY 38,070

21 Hotel Destinations Asia Pacific 21 Osaka Osaka is the second largest city in Japan, located in the Kansai region on the western side of Japan. Osaka dates back to the Asuka and Nara period. Under the name Naniwa, it was the capital of Japan from 683 to 745, long before Kyoto became leader. Even after the capital was moved elsewhere, Osaka continued to play an important role as a hub for land, sea and river-canal transportation. Its close proximity to key tourism destinations such as Kyoto, Nara and Kobe has also boosted inbound arrivals as Osaka is normally included as part of the popular Golden Route. Osaka is positioned as one of the top destinations in Japan both domestically and internationally, recording strong growth in demand due to stable economic fundamentals and its promotion of art and culture. Its close proximity to other destinations such as Kyoto, Nara and Kobe has also boosted tourism as Osaka is normally included as part of the popular Golden Route. The accommodation demand from international tourists remains strong in the Osaka market. As at YTD September, international accommodation guests in Osaka Prefecture recorded a y-o-y increase of 32% to 4.2 million. The number of domestic accommodation guests in Osaka prefecture reached 15.4 million as at YTD September, an 8.2% increase from the same period of the previous year. A new area in Universal Studio Japan (USJ), featuring Harry Potter, had a positive influence on tourism demand in Osaka in. According to Japan Ministry of Health, Labour and Welfare, hotel supply in Osaka prefecture comprised 374 hotels (56,992 ) as at March, representing an increase of 2.9% in room supply from As for the pipeline, The Park Front Hotel at Universal Studio Japan, a 598-room full-service hotel, is scheduled to open as one of USJ s official hotels, in the summer of International visitor arrivals are anticipated to increase within the next few years. Kansai International Airport announced a plan to construct a third terminal in 2015 for the exclusive use of international LCCs. Kansai International Airport aims to double the annual airport capacity to eight million people upon the completion of Terminal 3, which will be able to accommodate more demand from international travellers. Hyatt Regency Osaka Undisclosed Osaka Namba Washington Hotel Plaza JPY 8.9 billion R&B Hotel Umeda-Higashi JPY 1.5 billion Dormy Inn Namba JPY 700 million The Park Front Hotel at Universal Studio Japan 360 Osaka Marriott Miyako Hotel 4.2 million International Accommodation Guests (YTD Septembe ) 360 Note: Osaka Hotels refers to Luxury and Up-scale stock, unless otherwise stated. Source: STR Global (YTD December ), Japan Tourism Agency, JLL ADR - Average daily rate, RevPAR - Revenue per available room 80.8% JPY 17,960 JPY 14,506

22 22 Hotel Destinations Asia Pacific Shanghai As the Chinese middle class swells, domestic tourism is booming and Shanghai is among the biggest beneficiaries. With more than 25 million inhabitants, the port is an economic powerhouse, now connected to Beijing by high-speed rail. Cutting-edge infrastructure is also transforming the international visitor experience: a magnetic levitation train, which links the international airport to the city, reaches speeds of 430 kilometres per hour and provides a heady start to any stay. Visitors won t find the must-see attractions of Beijing, New York or Rome but they will find endless entertainment walking the streets of this exciting global mega-city. International visitor arrivals to Shanghai increased by 4.5% to 7.9 million in, almost double Beijing s arrivals. Shanghai received more than 8.8 million tourists during the week long National Day holidays, an increase of 15.8% from 2013, mainly due to effective promotion of domestic tourism. The development of Hongqiao Central Business District, Shanghai Pilot Free Trade Zone and Shanghai Disney Resort (although we note the opening date has now been delayed until early 2016) has stimulated demand from both corporate and leisure visitors. The opening of the National Exhibition and Convention Center will further stimulate growth of MICE demand. The pace of new hotel entering the market slowed in compared to previous years. There were four hotels with 1,662 opened, mainly in the first half of. Over 5,000 are expected to enter the market this year but it should be noted that opening dates are often delayed in Shanghai and several projects may well extend into the 2016 pipeline. Hotel demand is expected to increase in 2015, as the global economy recovers and Shanghai Pilot Free Trade Zone, Hongqiao Central Business District and Shanghai Disneyland increase visitors arrivals. The improvement of MICE facilities will also attract more MICE demand to Shanghai. Yueda Nanjiao Huadu RMB 75 million 18 Hebao Rd RMB 60 million 333 Pullman Shanghai South Shanghai Marriott Hotel Parkview Crowne Plaza Shanghai Noah Square Hyatt Regency Shanghai Chongming Shanghai Disney Resort HUALUXE Shanghai Pudong Kangqiao InterContinental Shanghai Wonderland W Shanghai Pudong Sheraton Shanghai Jiading Hotel 7.9 million Arrivals 1,662 Note: Beijing Hotels refers to upscale stock only. Source: STR Global (YTD December ), Shanghai Tourism Bureau, JLL ADR - Average daily rate, RevPAR - Revenue per available room 66.3% RMB 1,051 RMB 697

23 Hotel Destinations Asia Pacific 23 Beijing In Beijing the ancient rubs shoulders with the modern. As one of the six ancient cities in Mainland China, it has been the heart and soul of politics and society throughout its long history and consequently there is an unparalleled wealth of discovery to delight and intrigue travellers as they explore the city s ancient past and exciting modern development. The growth of the city s hotel industry didn t stop after the closing of the 2008 Olympic Games. Nor did ambitious infrastructure improvements: by the end of 2015 the city will have opened 14 new subway lines and last year city authorities announced 126 new projects that will see the further upgrading of this booming urban landscape. International visitor arrivals to Beijing declined by 5.0% over 2013, recording 4.3 million arrivals in. However, domestic tourism has shown dynamic performance throughout, reaching million visitor arrivals to Beijing, which is a 4.0% increase compared to Although there was some recovery in, driven by new opportunities from domestic tourism and economy transformation, hotels still experienced difficulties due to restrictions on government consumption and slowing economic growth. MICE demand has remained strong through the ongoing APEC meetings during. The main supply in was through international brands in the high-end category, with 1,860 entering the market. With several projects postponed from, there are estimated to be more than 2,000 in the pipeline for New brands including Hotel Nuo and the Mandarin Oriental will be making an entrance into the Beijing market. The integration of Beijing, Tianjin, and development of the capital economic circle will continue to attract MICE demand in the future. As well as this, the construction of Tongzhou District Universal Studios and a second airport will help facilitate international arrivals. There were no hotel transactions in Kempinski Beijing Sunrise CTS tower Metropark InterContinental Beijing City Center Tangram Hotel Mandarin Oriental Beijing 349 W Beijing 4.3 million Arrivals Beijing Wangfujing Renaissance hotel 1,860 Note: Beijing Hotels refers to upscale stock only. Source: STR Global (YTD December ), Beijing Tourism Bureau, JLL ADR - Average daily rate, RevPAR - Revenue per available room Rosewood Beijing 69.4% Grand Mecure DongCheng RMB 967 Yanqi Lake hotel by Kempinski Beijing Sunrise RMB 672

24 24 Hotel Destinations Asia Pacific Bangkok Bangkok may be in a period of political upheaval, but few industry experts doubt the long-term prospects of the Thai capital s hotel and hospitality sector. International tourists enjoy a colourful city break en route to Thailand s paradise coastlines. Bangkok hotels receive most of their guests from Asia with China, Japan, India and Korea representing the top four markets. Bangkok s sights, attractions, and city life appeal to diverse groups of tourists. Royal palaces and temples as well as museums constitute its major historical and cultural tourist attractions. Shopping and dining experiences offer a range of choices and prices. The city is also famous for its nightlife. International tourist arrivals to Bangkok numbered 15.5 million in, recording an 11.3% decline over This represented the first decline since 2009, due to the political demonstrations during the first quarter across the capital city followed by a military coup. China remains the biggest source market to Bangkok, followed by Japan, India and Russia. It must be noted that each of the top ten feeder markets witnessed a decline in the number of visitor arrivals during. The primary purpose of visit for the majority of tourists to Bangkok is leisure, followed by business and MICE. New room supply declined in compared to the past few years. Nevertheless, hotel room supply is expected to grow in the near future with more than 3,000 expected to enter the market during Notable hotel openings in included the Radisson Blu Plaza Hotel (four-star) and Holiday Inn Express Sukhumvit Soi 11 (three-star). Bangkok saw some respite in international visitor numbers towards the end of as the political situation stabilised. In the medium term, we expect market performance to rebound as political tensions ease and Bangkok tourism shows its resilience once again. Demand is forecast to continue to recover strongly in Four Points By Sheraton, Sukhumvit 15 Undisclosed Oakwood Apartments Trilliant Sukhumvit 18 Undisclosed Citrus Sukhumvit 22 Undisclosed Ibis IMPACT Crowne Plaza Sukhumvit Amara Bangkok Premier Inn Soi 11 Park Hyatt Central Embassy Radisson Blu Plaza Hotel 15.5 million Arrivals Le Méridien Suvarnabhumi Golf Resort and Spa 1,264 Note: Bangkok Hotels refers to Luxury stock only. Source: STR Global (YTD December ), Tourism Authority of Thailand, JLL ADR - Average daily rate, RevPAR - Revenue per available room Holiday Inn Express Sathorn 54.7% Holiday Inn Express Sukhumvit Soi 11 THB 5,820 U Sathorn Bangkok THB 3,181

25 Hotel Destinations Asia Pacific 25 Phuket Phuket is Thailand s largest island and one of the most popular tourist destinations in Southeast Asia. Located in the Andaman Sea, the island s long history has shaped the Phuket of the present with its diverse ethnic groups, culture and architectural influence. These attributes have made Phuket a complete tourist destination that offers a lot more beyond its natural heritage of sea, sand, forest, and world-renowned diving sites. Sino-Portuguese architecture casts its spell delighting visitors, while Phuket s style of hospitality has never failed to impress tourists from all walks of life. International visitor arrivals to Phuket reached 3.2 million in, recording a marginal improvement of 0.3% over Phuket may have benefited from tourists looking for alternatives to Bangkok as they tried to avoid the political demonstrations. During 2013 (latest available), China, Russia and Australia were Phuket s top three source markets, according to the Department of Tourism. Among Phuket s top ten source markets in 2013, Russia, Japan and China were the fastest growing markets registering a y-o-y growth of 68.7%, 21.4% and 19.5% respectively. During, Phuket witnessed an addition of 1,421 new, the majority of which were categorised in the upscale segment. The total number of in Phuket stood at 57,358 at year-end. The west coast (including Patong, Layan and Kamala) remains the most popular location for new hotel developments capturing 53.3% of total future supply between 2015 and International tourist arrivals should continue to grow driven by Chinese tourists and facilitated by the future completion of the expansion of the Phuket International Airport. In the medium to longer term, we expect occupancy levels to bounce back in light of growing demand and limited future room supply. Burasari Patong Phuket THB 1.3 billion 314 Grand Mercure Phuket Patong Novotel Phuket Karon Resort & Spa Best Western Patong Beach Hotel Tune Hotel Eastin Yama Hotel Phuket Centara Grand Moringa Resort & Spa Ramada Phuket Deevana Novotel Phuket Town Nikki Beach Hotel & Spa Ibis Styles Phuket Town 3.2 million Arrivals 1,421 Note: Phuket Hotels refers to Marketwide Hotels. Source: STR Global (YTD December ), Tourism Authority of Thailand, JLL ADR - Average daily rate, RevPAR - Revenue per available room 69.0% THB 4,178 THB 2,881

26 26 Hotel Destinations Asia Pacific Mumbai Home to major corporate and financial institutions, Mumbai has emerged as the economic powerhouse of the country and thus known as the Financial Capital of India. Mumbai also serves as a gateway to western India and has the second busiest domestic and international airport. Apart from business demand, Mumbai is also popular among leisure tourists as it serves as a base for visiting popular tourist destinations in Western India including Goa. Such a demand profile has proven to be a boon for the city s lodging market. During, both domestic as well as international passenger traffic to Mumbai airport grew to an all-time high of 23.9 million and 11.1 million respectively. For foreign tourists, Mumbai also serves as an entry point into India for connectivity to other destinations within the country. Hotels located in South Mumbai primarily cater to demand from the leisure segment. Mumbai is the commercial capital of India and thus the nature of lodging demand tends to be dominated by commercial demand, which contributes close to 75% of the city s overall lodging demand. MICE demand is typically generated from a number of large conventions organised in Mumbai and is expected to grow further with the development of proposed facilities like the Dhirubhai Ambani International Convention and Exhibition Centre (DAICEC) in BKC by Mumbai has seen very limited new hotel openings in the branded segment over the past few years. However, future supply includes 25 hotels comprising of 6,633 currently under different stages of development and planning. While the strong supply pipeline remains a challenge for the market in the near term, substantial improvements in infrastructure along with a positive economic outlook shall underpin the improvement in demand, with future supply to be fully absorbed over the medium to long term. There were no hotel transactions in 390 The Palladium Hotel 58 Majestic Court Sarovar Portico Navi Mumbai JW Marriott Sahar Airport Road Taj Airport Hotel, Terminal 1C 11.1 million Arrivals None 66.8% INR 8,769 INR 5,859 Note: Mumbai performance pertains to Luxury stock only. Source: STR Global (YTD December ), Airports Authority of India, JLL ADR - Average daily rate, RevPAR - Revenue per available room

27 Hotel Destinations Asia Pacific 27 Delhi Delhi is a city that bridges two different worlds. Old Delhi, once the capital of Islamic India, is a labyrinth of narrow lanes lined with crumbling havelis and formidable mosques. In contrast, the imperial city of New Delhi created by the British Raj is composed of spacious, tree-lined avenues and imposing government buildings. Delhi enjoys a diverse economic base driven by sectors such as information technology, banking, financial services and consulting. Apart from its commercial and political importance, the city is also an important leisure tourist destination, showcasing a rich and diverse cultural heritage. International passenger traffic reached an all-time high during at 13.4 million, a growth of 4.7% y-on-y. With the launch of an e-visa facility for visitors from 43 countries in November, international arrivals are expected to grow further in the near term. Lodging demand in Delhi includes a healthy mix of business, MICE and leisure. Business demand has rebounded post the election results and is likely to remain strong over the medium term, primarily driven by growing foreign investment into the country. The 316-room Ibis Delhi Airport opened in August, making it the first property operated by Accor in Delhi. There will be two additional hotels from the same operator Novotel and Pullman New Delhi Aerocity which are expected to be operational in Demand levels have shown an upward trend during across all star categories. We expect the surge in demand to continue over the medium term underpinned by a stable government formation at the centre, business friendly environment and continued government commitment to support the tourism industry. There were no hotel transactions in 316 Ibis Delhi Airport Lemon Tree Premier, Delhi Airport Holiday Inn New Delhi International Airport Red Fox Hotel, Delhi Airport Park Inn by Radisson IP Extension Novotel New Delhi Aerocity Pride Hotel Aerocity Pullman New Delhi Aerocity Vivanta by Taj Dwarka Dusit D2 Aerocity 13.4 million Arrivals 1,144 Note: Delhi performance pertains to Luxury stock only. Source: STR Global (YTD December ), Airports Authority of India, JLL ADR - Average daily rate, RevPAR - Revenue per available room 67.5% INR 9,372 INR 6,328

28 28 Hotel Destinations Asia Pacific Ho Chi Minh City As a result of the sweeping economic changes wrought by doi moi in 1986, Ho Chi Minh City, perched on the banks of the Saigon River and still known as Saigon to its eight million or so inhabitants, has changed its image from that of a war-torn city to one of a thriving metropolis. With all the key components of economic success fine restaurants, flash hotels, glitzy bars and clubs, and shops selling imported luxury goods are here, adding a glossy veneer to the city s hotchpotch landscape of French stones of empire, venerable pagodas and austere, Soviet-style housing blocks. International arrivals registered a y-o-y growth of 7.1% in to reach 4.4 million. was the third consecutive year of positive international arrival growth with a CAGR of 12.4% between 2011 and. Top source markets to Ho Chi Minh City include China, South Korea, Japan and USA. The Vietnam National Administration of Tourism targets 4.7 million foreign arrivals to the city in During, the Starcity Airport Hotel with 300 was the only addition in supply in Ho Chi Minh City. Hotel supply is expected to grow further with the addition of 1,577 during The tourism department plans to improve the quality of tourism products and services in hotels and river tourism, as they try to sustain the growth in tourism. The department aims to improve human resources and promote the city overseas. Mövenpick Hotel Saigon USD 30.4 million 300 Starcity Airport Hotel Le Méridien Saigon Ibis Grand Palace 4.4 million Arrivals % USD 116 USD 77 Note: Ho Chi Minh City Hotels refers to Marketwide Hotels. Source: STR Global (YTD December ), Vietnam National Administration of Tourism (VNAT), JLL ADR Average daily rate, RevPAR Revenue per available room.

29 Hotel Destinations Asia Pacific 29 Hanoi Hanoi, the capital of Vietnam and second largest city in the country, offers a fascinating blend of East and West, combining traditional Sino-Vietnamese motifs with French flair. It is largely unscathed from the decades of war, and is now going through a building boom, making it a rapidly developing city in Southeast Asia. Its crumbly, lemonhued colonial architecture is a feast for the eyes; swarms of buzzing motorbikes invade the ear, while the delicate scents and tastes of delicious street food can be found all across a city that unlike so many of its regional contemporaries is managing to modernise with a degree of grace. During, international arrivals to Hanoi increased by 16.3% from 2013 to reach an all-time high of three million. Visitor arrivals to Hanoi have shown sustained growth for five consecutive years. Top source markets to Hanoi include China, South Korea, Japan and USA. The growing number of domestic flights from Hanoi is benefiting the overall tourism industry as visitors are encouraged to travel to multiple destinations throughout Vietnam. During, 1,021 new entered the market, with the most notable openings being the Lotte Centre and JW Marriott is expected to witness an additional supply of 359 in the branded segment. Hanoi is continuing to work on its tourism development plan through to 2020, including the development of the Ba Vi-Suoi Hai zone into a national tourist zone. Moreover, the government continues to promote MICE tours by organising various international sports, cultural and political events and festivals. There were no hotel transactions in 445 JW Marriott 318 Lotte Centre The InterContinental Hanoi 3.0 million Arrivals % USD 109 USD 74 Note: Hanoi Hotels refers to Marketwide Hotels. Source: STR Global (YTD December ), Vietnam National Administration of Tourism (VNAT), JLL. ADR - Average daily rate, RevPAR - Revenue per available room

30 30 Hotel Destinations Asia Pacific Bali Known as the island of the gods, Bali is one of the most popular tourist destinations in the world. Few places on earth are blessed with the amount of sandy beaches, rugged coastlines, lush rice terraces, barren volcanic hillsides, panoramic views, art galleries, local traditions, culture and nightlife that Bali has to offer. On top of all this, Bali is benefiting from increased domestic and international visitor arrivals thanks to its continuously improving infrastructure, affordable air connections and Indonesia s stable economic growth. Despite the rapid growth of development and tourism, the Balinese tradition, culture and lifestyle is still what it was and continues to make the island stand out from other destinations. In, international visitor arrivals to Bali registered a 15.1% increase over the previous year to 3.7 million visitors, recording a new peak for Bali. The anti- Chinese riots in Vietnam, the MH370 flight incident and the military coup in Thailand resulted in a diversion of visitors from those countries directly to Bali and contributed to the growth in visitation. Major source markets to Bali showed remarkable growth in including Mainland China (+51.2% y-o-y), Singapore (+28.6% y-o-y) and Australia (+19.1% y-o-y). Improvements in infrastructure including the expansion of Ngurah Rai International Airport in June and an increase in flight connectivity from the major source markets have encouraged visitation to the resort destination. Hotel supply in the pipeline will be mainly located in the Seminyak, Pecatu, Kuta and Nusa Dua areas. If all projects materialise, JLL expect an addition of 12,831 between 2015 and 2018, representing an increase of 40.6% from to The increase in airlift as well as a visa-free initiative for several major source markets from 2015 is expected to draw more visitors to the resort island. However, in light of the significant increase in hotel supply over the next few years, this will put some pressure on the hotel market and also on existing hotels to upgrade their properties. There were no hotel transactions in 321 Mercure Bali Legian The Ritz-Carlton Bali Ramada Encore Bali Seminyak Double-Six Seminyak Golden Tulip Essential Denpasar Eaton Luxe Nirwana Bali Centara Crystal on the Bay Nusa Dua Hilton Garden Inn Bali Ngurah Rai Airport Hotel Indigo Seminyak 3.7 million Arrivals 3,838 Note: Bali Hotels refers to Luxury stock only. Source: STR Global (YTD December ), Statistics Indonesia, JLL ADR - Average daily rate, RevPAR - Revenue per available room. 70.5% USD 452 USD 319

31 Hotel Destinations Asia Pacific 31 Jakarta Primarily a city of government, business, industry and trade, Jakarta is also the main gateway to Indonesia s many tourism destinations. In Jakarta witnessed its highest ever number of visitor arrivals. Although the capital of the world s fourth most populous nation is seldom viewed as a centre for tourism and culture itself, efforts to improve the city s reputation as a service and tourism city have been stepped-up. In recent years, Jakarta has expanded its facilities for visitors by developing new multi-star luxury hotels, entertainment centres, fine restaurants as well as tourist attractions in an effort to boost visitor arrivals. In, international visitor arrivals to Jakarta were recorded at 2.3 million, a marginal 0.3% increase from Growth in international visitor arrivals slowed from 9.1% in 2013, possibly due to the presidential elections which took place during H1. International visitors to Jakarta are mainly derived from corporate and meetings, incentives, conventions and exhibitions (MICE) demand. The increase in flight connectivity between Jakarta and major gateway cities, and infrastructure improvements in the city, will continue to encourage visitation to the capital city. We estimate that 2,454 opened in Jakarta in, most of which are in the economy and midscale sectors. Hotel openings comprised domestic brands such as Swiss-Belinn as well as international brands including Holiday Inn Express, Ibis, Mercure, Best Western and Doubletree by Hilton. There were no upscale or luxury hotel openings in. Jakarta and Indonesia as a whole experienced a volatile early with the depreciation of the Indonesia Rupiah and the presidential elections. However, with the elections over and the economic situation stabilising, a cautious optimism has returned to the country with investors relooking at one of Southeast Asia s largest economies. The upcoming pipeline of luxury and upscale hotel developments will also strengthen Jakarta s standing as a key gateway city in Indonesia. There were no hotel transactions in 297 Holiday Inn Express Jakarta Pluit Citigate Ibis Styles Jakarta Airport Mercure Jakarta Sabang Swiss-Belinn Kemayoran Swiss-Belinn Airport Fairmont Jakarta Raffles Jakarta The Westin Jakarta InterContinental Pondok Indah Jakarta Sheraton Jakarta Gandaria City Hotel 2.2 million Arrivals 2,454 Note: Jakarta Hotels refers to Upscale stock only. Source: STR Global (YTD December ), Statistics Indonesia, JLL ADR - Average daily rate, RevPAR - Revenue per available room 63.7% USD 181 USD 115

32 32 Hotel Destinations Asia Pacific Yangon While no longer the nation s capital, Yangon remains the largest and most commercially important city in Myanmar and is a melting pot of different cultures and communities. Serving as the country s main entrance and seaport, it is the country s centre of business. The magnificent Shwedagon Pagoda dominates the city skyline, while at street level Yangon is a paradise for hunting out a variety of exotic arts and crafts. It still maintains its colonial charm with wide tree lined avenues, tranquil lakes, and gracious turn of the century architecture. Since the 2010 elections, Yangon s fortunes have skyrocketed along with its land prices, as both local and foreign investors scrambled to gain a foothold. Foreign visitor arrivals to Yangon have grown rapidly after cyclone Nargis in 2008, achieving a CAGR of 31.5% over the seven year period, albeit starting from a very low base. Arrivals grew by 18.9% to 972,597 during compared to the previous year. Thailand and Mainland China have been the top source markets to Myanmar over the past few years given their close proximity and long-standing economic cooperation. During, Thailand was the top source market to Myanmar, followed by Mainland China and Japan. The majority of lodging supply in Yangon can be characterised as unbranded, while supply considered to be of international standard remains fairly limited. However, there are more than 5,000 (mostly branded) slated to enter the market over the next three to five years. Once operational, total supply of international standard will more than double in Yangon. Tourist arrivals to Yangon are expected to continue growing aided by the expansion of the existing airport and construction of a new Hanthawaddy International Airport by In terms of supply, while the majority of future supply is categorised as luxury and upscale, we see a strong opportunity for branded midscale hotels since the segment remains largely untapped. There were no hotel transactions in 214 Sule Shangri-La Expansion (formerly Traders Hotel) Rose Garden Hotel (Phase-1) Shangri-La Residences (Phase-2) Novotel Hotel Max Hilton Yangon Rose Garden Hotel (Phase-2) 972,597 Arrivals % USD 169 USD 121 Note: Yangon hotels refer to Luxury and upscale hotels only. Source: Ministry of Hotels & Tourism, JLL ADR - Average daily rate, RevPAR - Revenue per available room, CAGR Compound Annual Growth Rate

33 Hotel Destinations Asia Pacific 33 Seychelles The granite islands of the Seychelles archipelago cluster around the main island of Mahé, home to the country s international airport and its capital, Victoria. Measuring 28 kilometres long by eight kilometres wide, the island is home to almost 90% of the Seychelles total population, reflecting the country s diverse ethnicity and descent from African, Indian, Chinese, and European populations. Together, the islands of Mahé, Praslin and La Digue form the cultural and economic hub of the nation and contain the majority of Seychelles tourism facilities as well as its most stunning beaches. An expensive destination renowned for its ultra-luxurious options, the Seychelles also offers plenty of quaint, affordable self-catering facilities and guesthouses. In, international visitor arrivals to Seychelles increased to 232,667, largely driven by European countries. However, the growth rate has slowed to 1.0% in compared to 10.7% in Germany, France and Italy remain the dominant source markets with a contribution of 15.4%, 13.9% and 8.5%, respectively. However, visitor arrivals from France and Italy declined by 9.4% and 8.7% y-o-y during. Chinese visitors offset this decline with a y-o-y growth of 72.4%. The Savoy Resort & Spa opened in May, adding 163 to the market. Supply is expected to continue to grow during 2015 with a total inventory of 284, including the 124-room Avani Seychelles Barbarons Resort & Spa that was launched in February The Seychelles Tourism Board plans to launch its I love Seychelles tourism promotion campaign during 2015, with the aim of raising Seychelles profile and strengthen awareness of Seychelles as a destination. The board plans to concentrate on the key European source markets and China, which includes the commencement of non-stop direct flights from Beijing to Seychelles. Banyan Tree Seychelles (70%) USD 25 million 123 Avani Seychelles Barbarons Resort & Spa Six Senses Zil Pasyon Nira Sathwa 232,667 Arrivals % (2013) USD 400 (2013) USD 260 (2013) Note: Seychelles Hotels refers to Marketwide Hotels. Source: Seychelles National Bureau of Statistics, JLL. ADR Average daily rate, RevPAR Revenue per available room.

34 34 Hotel Destinations Asia Pacific Maldives A vast stretch of 26 atolls in the azure waters of the Indian Ocean, the Maldives is one of the world s finest paradise resorts. Few destinations are blessed with such close proximity to so many fast-growing tourist markets: Russia, India, Mainland China and the emerging markets of Southeast Asia are all within 10-hour direct flights. But demand from Europe, the Maldives traditional visitor source, is growing too, with Germany supplying the second highest number of arrivals. Mainland China takes the top spot. Nightly rates are rocketing as a result, driving real estate transactions in access of USD 1 million per room as investors scramble to get their share of paradise. As at YTD December, visitor arrivals increased by 7.1% y-o-y to 1.2 million visitors. This increase was underpinned by strong growth in visitors from Mainland China, South Korea and India. The Mainland Chinese market has been a major source market that has resulted in a surge in visitor arrivals to the Maldives over the last few years. As the leading source market to the Maldives, Mainland China comprises about 30.2% of total visitor arrivals to the country in, which is more than three times that of the second leading source market; Germany. The fastest growing source markets as at the end of included India, South Korea and Mainland China with 19.9%, 15.1% and 9.6% growth, respectively. The latest resort to open in the Maldives is Amilla Fushi on Baa Atoll in December. The property is the first property under the Amilla brand created by The Small Maldives Island Co., and comprises 34 over-water villas and 36 land suites/villas. There were four resort openings in, adding 280 to the Maldives room inventory. Underpinned by its liberal trade environment, increasingly dynamic private sector, and robust growth in visitor arrivals, we expect investor interest in the Maldives to remain strong. Recent legislative changes that include acquiring islands on longer leases as well as the opportunity to extend existing leases will also help encourage investment demand. Outrigger Konotta Island Resort Undisclosed Beach House Iruveli USD 72 million Herathera Island Resort USD 33.3 million Outrigger Konotta Island Resort Radisson Blu Maldives Hulhumale Amilla Finolhu Maldives 105 Loama Resort Maldives at Maamigili 1.2 million Arrivals JA Manafaru Amilla Fushi Maalifushi by COMO Club Med Finolhu Villas % USD 756 USD 517 Note: Maldives Hotels refers to Marketwide Hotels. Source: STR Global (YTD December ), Ministry of Tourism, Arts & Culture, JLL ADR - Average daily rate, RevPAR - Revenue per available room

35 Hotel Destinations Asia Pacific 35 Sri Lanka Located south of the Indian subcontinent and just above the Equator amid the pleasant waters of the Indian Ocean, the tropical island nation of Sri Lanka is a place where nature s beauty remains abundant and unspoilt. Six years after the end of the Sri Lankan civil war, the tourism sector has seen tremendous growth. The impressive pace of infrastructure development including several new expressways and a second international airport, as well as focused destination marketing efforts, have strengthened the country s position as a competitive tourism destination. Sri Lanka continued on its high growth trajectory, with arrivals growing by 19.8% year-on-year to 1.5 million tourists. Total tourism earnings during the nine-month period from January through September (latest available) increased 31.4% to USD 1.6 billion in. The Sri Lankan Tourism Development Authority (SLTDA) has set a target of 2.5 million annual arrivals by 2016, which amounts to a compounded annual growth of over 25% y-o-y. While Sri Lanka earlier depended heavily on European tourist traffic, there has been a recent increase in tourist inflow from the Asia Pacific region, particularly from India and Mainland China. Visitors from Mainland China grew 136.1% in making it one of the fastest growing source markets to Sri Lanka, while India remained the top source market with a share of 15.9%. The 158-room Ozo Colombo opened in May, marking the entry of Onyx Hospitality in Sri Lanka. The hotel operator will open a 122-key Ozo Kandy in April 2015 and has also announced the ground breaking of the construction of a 172-key Amari branded resort in Galle in February With a new government formation under the leadership of President Maithripala Sirisena, the government remains committed on its focus to improve the overall tourism infrastructure in the country. Continued focus on facilitating FDI investment into the country, particularly in the tourism, infrastructure, knowledge services, export and manufacturing sectors will continue to drive business demand to Sri Lanka. Anantara Tangalle (49.9%) USD 11.6 million Dickwella Resort & Spa USD 11.4 million 242 Cinnamon Red Colombo Centara Ceysands Resort & Spa, Bentota Ozo Colombo 60 Best Western Elyon Hotel Colombo Marriott Weligama Anantara Tangalle Ozo Kandy 1.5 million Arrivals % USD 114 USD 82 Note: Sri Lanka Hotels refers to Luxury Hotels only. Source: SLTDA, JLL ADR - Average daily rate, RevPAR - Revenue per available room

36 36 Hotel Destinations Asia Pacific Quick Facts INTERNATIONAL VISITOR ARRIVALS NUMBER OF NEW ROOMS OCCUPANCY USD AVERAGE DAILY RATE (ADR) USD REVENUE PER AVAILABLE ROOM (REVPAR) Hong Kong (Luxury) Macau (Luxury) Singapore (Luxury) Kuala Lumpur (Luxury & Upscale) Sydney 60.8 million 1, % million % million 1, % million (YTD October ) 22.6 million (YTD September ) % % Melbourne 14.8 million (YTD September ) % Auckland 2.8 million % Manila 2.7 million (YTD July ) 2, % Seoul Taipei (Luxury & Upscale) Tokyo (Luxury) Osaka (Luxury & Upscale) Shanghai (Upscale) 14.2 million 1, % million (YTD December ) % million % million % million 1, %

37 Hotel Destinations Asia Pacific 37 INTERNATIONAL VISITOR ARRIVALS NUMBER OF NEW ROOMS OCCUPANCY USD AVERAGE DAILY RATE (ADR) USD REVENUE PER AVAILABLE ROOM (REVPAR) Beijing (Upscale) Bangkok (Luxury) Phuket Mumbai (Luxury) Delhi (Luxury) Ho Chi Minh City Hanoi Bali (Luxury) Jakarta (Upscale) Yangon (Luxury and Upscale) Seychelles Maldives Sri Lanka (Luxury) 4.3 million 1, % million 1, % million 1, % million % million 1, % million % million % million 3, % million 2, % , % , % million % (2013) 1.2 million % (2013) 260 (2013)

38 38 Hotel Destinations Asia Pacific Contributors Scott Hetherington Chief Executive Officer Asia Craig Collins Chief Executive Officer Australasia Troy Craig Managing Director Strategic Advisory Asia Pacific Tom Sawayanagi Managing Director Japan Mark Durran Managing Director Investment Sales Australasia Mike Batchelor Managing Director Investment Sales Asia Frank Sorgiovanni Head of Research Asia Pacific

39 Front cover Shanghai skyline, China About JLL Hotels & Hospitality Group JLL s Hotels & Hospitality Group serves as the hospitality industry s global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centers; mixed-use developments and other hospitality properties. The firm s more than 320 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world totaling more than US $48 billion, while also completing approximately 4,500 advisory, valuation and asset management assignments. The group s hotels and hospitality specialists provide independent and expert advice to clients, backed by industry-leading research. For more news, videos and research from JLL s Hotels & Hospitality Group, please visit: download the Hotels & Hospitality Group app for ios and Android, or view our e-magazine The Hotel Investor, available for ipad.

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