Hotel Developers in Thailand Have Put 3 of 4 Projects on Hold – Skift

Skift Take

Hotel developers can’t overcome their fear factor as they put 73 percent of new projects on hold. They’re waiting for the return of Chinese and Russian visitors. They may be waiting quite a while.

Here are some excerpts of what the Daily Lodging Report informed its readers during the past week. If you’re not a subscriber, you should be. Sign up now, here.

Sunday, May 1

According to Lodging Econometrics’ Construction Pipeline Trend Report for Canada, at Q1 2022, “the country’s hotel construction pipeline currently stands at 258 projects/35,768 rooms.” At the close of the first quarter, the province of Ontario leads Canada’s construction pipeline with 151 projects, followed by British Columbia and Alberta. Cities in Canada with the most projects in the pipeline in the first quarter continue to be led by Toronto with 64 projects/9,312 rooms, followed by Montreal, Vancouver, Niagara Falls, and Ottawa. The top hotel franchise companies in Canada’s construction pipeline at Q1’22 were Marriott International, Hilton Worldwide, and InterContinental Hotels Group. Top brands were Hampton by Hilton and IHG’s Holiday Inn Express.

Singapore-based SC Capital Partners has secured commitments from two global institutional investors for JPY122 billion, or US$951 million, for its new Japan Hospitality Fund. The fund will focus on acquiring minor repositioning and operating hospitality-related investments in Japan. That will include real estate trusts, beneficiary interests representing real estate, REITs and other companies. The initial commitment was initial commitments total JPY61 billion (US$475.16 million) with a further top-up option to increase the commitments to US$951 million.

Marie-Noel Schwartzmann will become the new Chief Development Officer of Deutsche Hospitality, on May 1.

Skift Note: Canada and Japan are relatively attractive markets for hotel development.

Monday, May 2

The U.S. Hotels State of the Union report by CBRE revealed that the hotel recovery has been continuing despite the downward pressure on economic growth. However, consumers are feeling inflation’s pinch, and hotels are struggling to meet the increased costs and supply chain issues. Since the start of the pandemic, hotel wages have been growing at twice the rate of the U.S. overall and 43% faster than hourly retail wages. West Coast Asia-dependent markets still lag. Overall, operating revenues show signs of near recovery to earlier peaks. However, the reopening of lower margin amenities and inflationary pressures have caused GOP to lag.

Indian Hotels Company said they are aiming to be debt-free by April 2023. They plan to retire all their debt when it gets due, repaying whatever they can by the end of April with the rest to be paid off by April 2023. IHCL also plans to open 20 new hotels this year with the target being 60 for the next three years. They narrowed their annual losses to Rs 265 crore from Rs 796 crore in the previous year.

Hyatt Hotels Corporation announced the introduction of the Caption by Hyatt brand with the planned summer 2022 opening of the Caption by Hyatt Beale Street Memphis in Tennessee, and many more to follow.

Skift Note: The CBRE State of the Union report is full of fascinating insights. Meanwhile, kudos to IHCL for navigating the pandemic crisis so adroitly and to Hyatt for launching its new brand.

Tuesday, May 3

C9 Hotelworks warned that Phuket is showing more signs of fatigue than the rest of Thailand’s hotel sector and C9 is pretty worried about the entire country’s hotel business. 73% of new hotel developments in Phuket are dormant or put on hold. They described it as owners suffering from a fear factor in light of a volatile marketplace and an unclear future outlook. Negative sentiment and stressed liquidity are what they believe have affected development with an incoming supply of 33 hotels with 8,616 rooms facing an unknown future. C9’s Phuket Hotel Market Update 2022 found that 55% of the hotel projects are mixed-use, or hotel residences with rental-based investment schemes that target individual investment buyers. C9 believes some of these real estate-led hospitality projects are unlikely to return to the pipeline. In 2021, there were only 900,000 visitors, down -90% from 2019.

Oberoi Hotels patriarch P R S Oberoi has stepped down as chairman of EIH Associated Hotels Ltd., an associate company of the group’s flagship EIH Ltd., where he remains executive chairman. The group operates 33 hotels. The board of directors announced the appointment of Shib Sanker Mukherji as non-executive chairman of the company with effect from May 2. SS Mukherji had been vice chairman of EIH Associated until May 1.

Skift Note: The pace of China’s reopening is key to unlocking Phuket and broader Thailand’s hotel recovery. The loss of Russian tourism hasn’t helped either. Caution is in order, though a few places, like Hua Hin and renovations on Koh Samui, are rare bright spots.

Wednesday, May 4

Summit Hotels and Chatham Lodging Trust also reported results, somewhat lost in the hoopla between the two giants, three if you included Hilton’s report yesterday. For Summit, their EBITDA came in below estimates, and they are still tracking below 2019 in RevPAR, even through April. INN also said they are exercising their option to buy the AC/Element dual-branded property in Miami’s Brickell while selling their Hilton Garden Inn San Francisco Airport North. As for CLDT, EBITDA jumped from negative to positive while cash flow was positive, although not as strong as 4Q21.

Avison Young Hospitality Group announced the hotel brokerage firm has closed 29 separate hotel transactions over the last 150 days totaling just under half a billion in value. Twelve of the hotels were either Hilton, Marriott, or Hyatt assets and were located in most US regions. Most notable was the Fall River Resort, Estes Park, CO; Hotel Monaco, Chicago, IL; 15-story IHG – Downtown Nashville; Hyatt Place/Hyatt House dual brand, Scottsdale, AZ; and the Courtyard Oceanfront, Ocean City, MD.

Skift Note: May the Hotel Force be with you, on May 4.

Thursday, May 5

French designer Philippe Starck’s YOO Hotels will make its Australian debut in South Melbourne in 2025. Hotel management company La Vie Hotels & Resorts secured the exclusive rights to bring the brand to the Pacific region. The 88 room Nu by YOO Hotel will be part of a $170 million mixed-use development at 28 Albert Road, next to the new Anzac metro station, overlooking the Shrine of Remembrance and Royal Botanic Gardens. YOO has designed residential, mixed-use and hotel projects in more than 36 countries. The South Melbourne hotel is part of a mixed-use project being undertaken by DCF Property Group. La Vie plans to take the brand to other big capital cities and premier resort locations around the Pacific.

Skift Note: YOO Hotels shows an interesting halfway approach in-between independent boutiques and chains designing soft brands in the lifestyle segment.

hotel-developers-in-thailand-have-put-3-of-4-projects-on-hold-skift Hotel Developers in Thailand Have Put 3 of 4 Projects on Hold - Skift
The Nu By Yoo hotel at 28 Albert Road is due to open in 2025. Source: Yoo.

Source: skift.com

Leave A Reply