Hotels & Hospitality Group November Hotel Destinations Pearl River Delta

Transcription

1 Hotels & Hospitality Group November 2014 Hotel Destinations Pearl River Delta

2 Welcome to the inaugural edition of our Hotel Destinations Pearl River Delta publication, an overview providing a snapshot of key hotel markets within China s Pearl River Delta. 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 Hong Kong, Macau, Guangzhou and Shenzhen. We trust you will find this publication relevant, concise and insightful. Enjoy the read and look out for the next edition! Scott Hetherington Chief Executive Officer, Asia JLL Hotels & Hospitality Group Phoebe Teo Senior Vice President, Hong Kong JLL Hotels & Hospitality Group

3 Hotel Destinations Pearl River Delta 03 Contents How Hong Kong is attracting millennial travellers City Profiles 06 Hong Kong 07 Macau 08 Guangzhou 09 Shenzhen Quick Facts Contributors

4 How Hong Kong is attracting millennial travellers Has Hong Kong lost its appeal as a mainstay among Chinese travellers?

5 Hotel Destinations Pearl River Delta 05 Has Hong Kong lost its appeal as a mainstay among Chinese travellers? It s a question the hospitality industry is confronting head-on as China s tourism trends change. JLL asks Lothar Nessmann, COO of Hotel Jen what the city must do to retain favour among Chinese travellers. Hong Kong must adapt to keep its edge in Asia s increasingly competitive tourism market, that s the message from Lothar Nessmann, COO, Hotel Jen. China s new consumers are very well travelled and educated, they know what they like and they can, and will, compare what s on offer, said Nessmann. These people have also travelled to London, Rome and New York. They ve seen international standards. Mainland Chinese tourists traditionally account for two-thirds of total arrivals to Hong Kong. Even in the face of the recent Occupy Central protests, the city has sustained demand. However, over the last decade, a younger generation of upwardly mobile, middle class Chinese tourists have discovered destinations further afield. Outbound tourism figures show a growth rate of more than 15 per cent year-on-year and, while Hong Kong still tops the table, Thailand, Taiwan and South Korea are competing for China s custom. The competition between major cities in Asia is increasing, take Singapore and Hong Kong for example adds Nessmann. There needs to be continuous benefit for the consumer and these cities will now compete in everything from entertainment to restaurants in the coming years. Hong Kong would be ill-advised not to see any other city as a threat. Demand from China has driven a swell in hotel stock in Hong Kong over the last ten years in 2014 alone 3,331 hotel are expected to open, according to the local tourism board. Brands such as Shangri La, InterContinental, Starwood and Marriott represent the top tier of the city s offering. But a new wave of mid-range properties are propping up demand. There is still huge room for luxury and the classic brands will remain but there s a new millennial traveller to cater for. They re not only young in age but young at heart. Nessmann led the creation of the Hotel Jen brand, which was designed specifically for the millennial minded traveller. Having launched in Singapore in September 2014, Hotel Jen will next rollout in Hong Kong, Brisbane, Penang, Johor Bahru, Manila, Maldives, Beijing and Shenyang up until March China s new consumers are very well travelled and educated, they know what they like and they can, and will, compare what s on offer, Lothar Nessmann COO of Hotel Jen What we are seeing is a new wave of visitors who are slightly younger than those we saw several years ago, says Nessmann. They re smarter, more experienced travellers. We understand you don t want a $15 mars bar. You can get a coffee when you leave so you can enjoy it in the taxi to work. You don t need to walk down the street to find one. There are mobile charging stations everywhere we know our customers travel with two or three devices. Hotels aside, Nessmann urges every industry from entertainment to retail to rethink their offering. Hong Kong needs to hold its hand up for major international sporting events and music concerts if it wants to attract these consumers, he adds. While Hong Kong is fighting to entice a different kind of traveller, he s confident that the People s Republic s vast population can support the city s burgeoning hotel industry. The Chinese market is large enough that other potential visitors are now finding Hong Kong. The hotels in Hong Kong are very dynamic and have, for a long time, set trends. That will continue. The city s latest hotels may not serve up the usual frills associated with five-star hospitality but it s catering to more than just a mass movement of millennials: it s redefining luxury. A new generation of travellers are increasingly teaching brands that it s the little things that count.

6 06 Hotel Destinations Pearl River Delta 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. HIGHLIGHTS Tourism Demand Supply Outlook According to the Hong Kong Tourism Board (HKTB), the number of international visitor arrivals exceeded 54 million in 2013, an 11.7% increase over Growth in visitation to Hong Kong has been driven primarily by the outbound travel market from Mainland China, which accounted for 75% or 40.7 million of total arrivals. Corporate travel is one of the major demand generators in Hong Kong due to its status as one of the world s leading financial and business centres. Hong Kong is regarded as an attractive location for regional headquarters, owing to its favourable business environment, transparent legal and regulatory conditions, highly competitive corporate tax levels, and close proximity to Mainland China. According to the HKTB, approximately 2,488 hotel are expected to enter the supply in the second half of As at Q2 2014, approximately 843 hotel have opened, most of which are independently or locally operated and relatively small in room count (below 150 ). If all projects materialise, hotel room supply will increase by 4.8% to 73,348. The HKTB has undertaken several measures such as waiving the Hotel Accommodation Tax since 1 July 2008, to attract visitors to extend their length of stay in Hong Kong. However, the average length of stay continues to face downward pressure as corporate budgets remain tight and leisure travellers participate in more multicity itineraries (Hong Kong, Macau, Guangzhou and Taiwan). NEW HOTELS NOTABLE HOTEL DEALS Mercer by Kosmopolito HKD 545 million Printemp Hotel Apartment HKD 340 million UPCOMING HOTELS Hotel sáv 388 Un-named hotel on 60 Portland Street, Yau Ma Tei, Kowloon 199 Somerset Victoria Park Hong Kong 92 TUVE 68 Pop Hotel (Tsim Sha Tsui) Dorsett Tsuen Wan Hotel QUICK FACTS 54.3 million International Visitor Arrivals iclub Fortress Hill Hotel 2,623 Number of New Rooms 2013 Note: Hong Kong Hotels refers to Luxury stock only. Source: STR Global (YTD Sep 2014), Hong Kong Tourism Board, JLL ADR Average daily rate, RevPAR Revenue per available room iclub Sheung Wan Hotel 77.8% Occupancy Ovolo Hotel Southside HKD 3,641 Average Daily Rate (ADR) The Pottinger HKD 2,833 Revenue per Available Room (RevPAR)

7 Hotel Destinations Pearl River Delta 07 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. HIGHLIGHTS Tourism Demand Supply Outlook The proportion of same-day visitors to Macau was approximately half of total visitor arrivals although the average length of stay for overnight visitors is just one to two days. As at YTD June 2014, visitor arrivals showed a more optimistic 8.1% y-o-y improvement to 15.3 million, primarily due to the increase in Mainland Chinese visitors, who remain the primary source market to Macau. As at YTD June 2014, 31.8% of Mainland Chinese visitors came via the Individual Visitor Scheme. In terms of Mainland Chinese provinces and municipalities, 79.2% of Mainland Chinese visitors were from the Guangdong province, followed by 6.3% from Shanghai and 4.3% from Beijing. In addition, 71.1% of Mainland Chinese travel to Macau via land. There are a significant number of hotel scheduled for completion in the next three to five years, with more than 9,000 confirmed hotel in the pipeline. The development of these projects will depend on availability of financing although we do not foresee this as a major hurdle. Macau s hotel market will continue to improve as economic co-operation with Mainland China strengthens. The September 2013 legislative election has further confirmed that voters support for the government s pro-beijing, procasino direction, and will likely remain so under chief executive Fernando Chui s leadership term. NEW HOTELS There were no new hotels opened in NOTABLE HOTEL DEALS There were no sales recorded in UPCOMING HOTELS Crowne Plaza Macau 200 Ascott Macau 110 QUICK FACTS 29.3 million International Visitor Arrivals ,067 Number of New Rooms % Occupancy MOP 1,702 Average Daily Rate (ADR) MOP 1,541 Revenue per Available Room (RevPAR) Note: Macau Hotels refers to Luxury stock only. Source: STR Global (YTD Sep 2014), Macau Government Tourist Office, JLL ADR Average daily rate, RevPAR Revenue per available room

8 08 Hotel Destinations Pearl River Delta Guangzhou As the capital and largest city of Guangdong province, Guangzhou is the main manufacturing hub of the Pearl River Delta and one of Mainland China s leading commercial and industrial zones. The China Import and Export Fair (Canton Fair) is held every year in Guangzhou and is a major event that attracts visitors worldwide. For these reasons, corporate demand has been a large part of the tourism market. However, Guangzhou s appeal is more than just commercial. Its various cultural attractions such as museums, exhibitions, historic landmarks and heritage sites attract both international and domestic leisure tourists. HIGHLIGHTS Tourism Demand Supply Outlook In 2013, overnight tourist arrivals to Guangzhou reached 50.4 million, representing a 4.8% growth y-o-y. International tourist arrivals decreased 3% y-o-y to 7.7 million and domestic tourist arrivals increased 6.4% y-o-y to 42.7 million. Amongst the international visitors, 64% were from Hong Kong, Macau and Taiwan. Tourism receipts totalled RMB 220 billion, a 15.2% increase over the previous year. Due to its location, Guangzhou serves as the gate to southern Mainland China the go-to destination for tourists entering the Mainland from Hong Kong, Macau and neighbouring cities in Southern Asia. Corporate demand has been a major part of the tourism market, driven mostly by large conferences and exhibition events. However, entertainment projects and resorts have also opened in recent years to attract leisure tourists from all over the world. NEW HOTELS There are six international upscale and luxury hotels that have opened or are in the pipeline, adding about 1,064 to the hotel market. The 32-room Somerset Riviera Guangzhou opened in August. Other openings include the local upper mid-scale chain Leeden Hotel Jingxi and six midscale and economy local hotels. Currently there are around 464 hotels in Guangzhou. Canton Fair and Spring Fair will continue to boost Guangzhou s hotel market. Even though the number of visitors attending exhibitions has increased slightly compared to the same period last year, reaching around 600,000 as at the end of Q2 2014, visitation has not recovered to levels before the global financial crisis. Given the slowing domestic economy combined with austerity measures and general market oversupply, any significant upward movements in Guangzhou s hotel market will be unlikely, although we do expect it to remain largely stable. NOTABLE HOTEL DEALS There were no notable hotel deals. 32 Somerset Riviera Guangzhou UPCOMING HOTELS IN 2014 Holiday Inn Airport Guangzhou 339 Aloft Guangzhou, University Park 272 Holiday Inn Guangzhou Science City 254 Dusit Devarana Hot Springs & Spa Conghua Guangzhou 133 Citadines Lizhiwan Guangzhou 34 QUICK FACTS 50.4 million International Visitor Arrivals 1,064 Number of New Rooms Note: Guangzhou Hotels refers to Luxury stock only. Source: STR Global (YTD Sep 2014), Guangzhou Statistics Bureau, JLL ADR Average daily rate, RevPAR Revenue per available room 66.8% Occupancy RMB 929 Average Daily Rate (ADR) RMB 620 Revenue per Available Room (RevPAR)

9 Hotel Destinations Pearl River Delta 09 Shenzhen Located in Guangdong province, Shenzhen is southern Mainland China s major financial hub. The sub-provincial city borders the cosmopolitan Hong Kong to the south and lies southeast to the provincial capital Guangzhou. As Mainland China s first and one of the most successful Special Economic Zones, Shenzhen s modern cityscape is the result of the vibrant economy made possible by rapid foreign investments. Home to the Shenzhen Stock Exchange as well as the headquarters of numerous high-tech companies, Shenzhen is also on track to overtake Hong Kong as the world s third busiest container port. HIGHLIGHTS Tourism Demand Supply Outlook In 2013, overnight tourist arrivals to Shenzhen reached 45.7 million, a 10.1% growth y-o-y. Domestic tourists constituted the majority with 33.5 million arrivals, growing 14.0% y-o-y. International tourist arrivals grew marginally by 0.7% y-o-y, contributing 12.1 million arrivals. Amongst the international visitors, 86% were from Hong Kong, Macau and Taiwan. As at YTD August 2014, Shenzhen s total tourist arrivals increased by 9.7% over the same period last year. Corporate demand has been the leading driver for the local tourism market. Nevertheless, Shenzhen has also become a top destination for leisure travel, as the city offers vibrant cultural attractions such as the Window of the world, shopping malls, beaches, golf courses (including one of the world s largest), and a selection of amusement parks that solidifies the city as China s capital of theme parks. There are 4 confirmed international upscale hotel projects in 2014 that have opened or are in the pipeline, which will add about 902 to the hotel market. Other openings are in the economy sector such as the two new Super 8 Hotels. Currently, there are around 365 existing hotels in Shenzhen. The city continues to implement policies to attract corporate visitors. For example, since the development of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, the pilot district has been populated by more than 14,000 companies, including 47 Fortune 500 companies. Both leisure and corporate visitation is expected to rise. NEW HOTELS NOTABLE HOTEL DEALS There were no notable hotel deals UPCOMING HOTELS JW Marriott Shenzhen Bao an 353 Somerset Grandview Shenzhen 192 Hilton Garden Inn Shenzhen Bao an QUICK FACTS 45.7 million International Visitor Arrivals Hyatt Place Shenzhen Dongmen 902 Number of New Rooms 67.4% Occupancy RMB 1,184 Average Daily Rate (ADR) RMB 797 Revenue per Available Room (RevPAR) Note: Shenzhen Hotels refers to Luxury stock only. Source: STR Global (YTD Sep 2014), Shenzhen Statistics Bureau, JLL ADR Average daily rate, RevPAR Revenue per available room

10 10 Hotel Destinations Pearl River Delta Quick Facts INTERNATIONAL VISITOR ARRIVALS 2013 NUMBER OF NEW ROOMS 2013 OCCUPANCY USD AVERAGE DAILY RATE (ADR) USD REVENUE PER AVAILABLE ROOM (REVPAR) Hong Kong Macau Guangzhou Shenzhen 54.3 million 2, % million 2, % million 1, % million % Sources STR Global (YTD Sep 2014), Hong Kong Tourism Board, Macau Government Tourist Office, Guangzhou Statistics Bureau, Shenzhen Statistics Bureau, JLL

11 Hotel Destinations Pearl River Delta 11 Contributors Scott Hetherington Chief Executive Officer Asia Phoebe Teo Senior Vice President, Strategic Advisory Hong Kong Frank Sorgiovanni Vice President, Research Asia Mandy Li Senior Vice President China Murong Yang Associate, Strategic Advisory Hong Kong Front cover Cityscape of Macau with bridge and tower under sunset in Macao, Asia. About JLL 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 300 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 nearly US $36 billion, while also completing approximately 4,000 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: or download the Hotels & Hospitality Group s iphone app or ipad app from the App Store.

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