The 249-key Holiday Inn Express Suwon Ingye was acquired by Korea-based co-living operator, Homes, with a joint investment from British asset management company ICG. Opened in 2017, the property is strategically located within a short distance of Suwon City Hall and various demand generators. However, the property ceased operation in 2022 due to the prolonged impact of COVID-19 and the decreasing number of business travelers and Chinese tourists to Suwon.
The acquisition marks the first deal of the 300-billion-won fund by Homes and ICG. Homes currently operates six co-living projects in Seoul, including Gangnam and Yongsan, and plans to expand the capacity to 2,500 rooms by 2024. In view of the growing interest in the rental housing market, co-living is considered suitable for single-person households in major cities. With the joint investment from ICG and other investors, Homes is able to accelerate the expansion by acquiring distressed properties for future projects.
2. Westin Beijing Chaoyang, China
Hong Kong-listed China Jinmao Holdings Group (“Jinmao”) divested the ownership company of the 550-key Westin Beijing Chaoyang to Beijing Bohai Runze Business Management Co. Ltd. for RMB 2.87 billion (USD 402 million) or RMB 5.2 million (USD 732,000) per key. Opened in 2008, the property features five food and beverage outlets, a fitness center with an indoor pool and spa, and 1,400sqm meeting space.
The sale is expected to bring in a gain of RMB 1.27 billion, which would be used for operations and future investment. According to the local news, Jinmao is shifting toward an asset-light strategy for hospitality and residential projects and is focusing on retail assets.
Deal Watch
Viva Land, a company linked to jailed Troung My Lan, is in the process of selling the 134-key Hotel Telegraph, or former SO/ Singapore, at the heart of Singapore to an entity related to Sunray Woodcraft Construction. The selling price is reported to be at a 30% discount from the purchase price of S$240 million last year. The price under discussion indicates a price of S$1.27 million per room in the central business district, and combining with the property and adjacent office building presents a redevelopment opportunity for a larger mixed-use complex.
Travel News in Asia Pacific
Cambodia
Cambodia welcomed over 4.2 million international tourists in September, approximately 93% of pre-pandemic levels in 2019. Starting in May, the number of international visitors showed an over 90% recovery, boosted by travelers from Thailand, Vietnam, and China. Phnom Penh and Siem Reap (home to Angkor Wat) were the top two destinations among foreign visitors, while domestic visitors enjoyed coastal zones, namely Preah Sihanouk.
With the newly opened Siem Reap-Angkor International Airport in October, it is now easier to travel to the most popular attractions in Cambodia, Angkor Wat, via air transportation. The new airport is equipped with a 3,600-meter-long runway with an annual capacity of 7 million passengers. The new airport replaced the old airport, which is about 5 kilometers from the attraction, and brought damaging vibration to the foundations of the temples. The new airport was built at a cost of approximately USD 1 billion under a 55-year build-operate-transfer (BOT) program between Cambodia and China.
China
While China outbound travel and domestic travel are booming after the restrictions were relaxed, inbound travel undergoes a sluggish recovery, particularly for foreign visitors. Shanghai, for example, recorded 269,700 foreign visitors in September, about 44% of the levels in 2019. On the other hand, Beijing welcomed 104,500 foreign visitors in the same month, a 34% recovery. Due to the ease of securing travel permits, inbound visitors from Hong Kong SAR, Macau SAR, and Taiwan showed a strong recovery. The visa for foreign visitors and the number of flights remained a pain point for inbound foreign travelers.
Due to the slowdown of the Chinese economy, Chinese travelers turned conservative when planning leisure travel. During the golden week in early October, domestic travel remained the most desired option over outbound travel, according to a survey. Approximately 826 million domestic travelers, a 71% year-on-year growth, were recorded during the eight-day holiday.
Laos
In the first nine months of 2023, Laos recorded roughly 2.5 million foreign tourists, 52% of comparable figures in 2019. ASEAN countries, namely Thailand (40%) and Vietnam (24%), are the key feeder markets, while China, the second largest feeder market in 2019, accounted for 19% of foreign visitors. With the China-Laos railway connecting Boten and Vientiane, travel and trade between the two countries became easier. In November, the first cross-border train tour to Vientiane was launched from Beijing, with stops at Hubei, Xishuangbanna, Luang Prabang, and Vang Vieng.
Laos will launch the tourism promotion campaign ‘Visit Laos Year 2024’ on November 23, which coincides with the annual That Lung festival. The campaign aims to attract at least 4.6 million domestic and foreign visitors, bringing in an estimated tourism revenue of USD 712 million next year. At the same time, Laos would assume the ASEAN chairmanship in 2024, and several conferences, including the ASEAN Tourism Forum, are expected to take place in Vientiane as well.
Recovery in Key Markets
Overall, the growth of visitor arrivals in key markets slowed down in September. In terms of monthly recovery, Japan reached 96% recovery of 2019 levels, followed by Cambodia’s 94% and Macau’s 83%. Hong Kong, on the other hand, dropped to 59% in September due to the drop in visitors from mainland China.
Transactions that Matter
1. Holiday Inn Express Suwon Ingye, South Korea
2. Westin Beijing Chaoyang, China
Deal Watch
Viva Land, a company linked to jailed Troung My Lan, is in the process of selling the 134-key Hotel Telegraph, or former SO/ Singapore, at the heart of Singapore to an entity related to Sunray Woodcraft Construction. The selling price is reported to be at a 30% discount from the purchase price of S$240 million last year. The price under discussion indicates a price of S$1.27 million per room in the central business district, and combining with the property and adjacent office building presents a redevelopment opportunity for a larger mixed-use complex.
Travel News in Asia Pacific
Cambodia
China
Laos
Recovery in Key Markets
Overall, the growth of visitor arrivals in key markets slowed down in September. In terms of monthly recovery, Japan reached 96% recovery of 2019 levels, followed by Cambodia’s 94% and Macau’s 83%. Hong Kong, on the other hand, dropped to 59% in September due to the drop in visitors from mainland China.