TOURISM AND HOSPITALITY IN ASIA PACIFIC February 2018 AGENDA - PowerPoint PPT Presentation

TOURISM AND HOSPITALITY IN ASIA PACIFIC February 2018

AGENDA • Trends in the hospitality sector in SE Asia / Global • Demand • Occupancy and room rates • Supply • Infrastructure • Challenges & opportunities of hotels in a frontier market • What makes hotels work – or fail • Hotel Design and Operation • Operator Selection - what to look out for • Lessons learnt from the Vietnam experience 2 CBRE | CAMBODIA

ARRIVALS International Visitor Arrivals 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - 2010 2011 2012 2013 2014 2015 2016 2017 Cambodia Myanmar Vietnam Indonesia Laos 3 CBRE | CAMBODIA

ARRIVALS International Visitor Arrivals 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - 2010 2011 2012 2013 2014 2015 2016 2017 Cambodia Myanmar Vietnam Indonesia Malaysia Thailand Laos 4 CBRE | CAMBODIA

GROWTH IN ARRIVALS Annual Changes in International Visitor Arrivals 35% 30% 25% 20% 15% 10% 5% 0% 2011 2012 2013 2014 2015 2016 2017 -5% -10% Average Cambodia Vietnam Indonesia Malaysia Thailand Laos 5 CBRE | CAMBODIA

OCCUPANCY Occupancy (MAT) 85% 80% 75% 70% 65% 60% 55% 50% Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Hanoi Ho Chi Minh City Bangkok Kuala Lumpur Manila Jakarta Source: STR Global, CBRE Hotels 6 CBRE | CAMBODIA

ROOM RATES IN USD U Average Daily Rate (MAT) United States - Dollar 140 130 120 110 100 90 80 70 60 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Hanoi Ho Chi Minh City Bangkok Kuala Lumpur Manila Jakarta Source: STR Global, CBRE Hotels 7 CBRE | CAMBODIA

ROOM RATE GROWTH Local currency Average Daily Rate (MAT) Indexed 150 140 130 120 110 100 90 80 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Hanoi Ho Chi Minh City Bangkok Kuala Lumpur Manila Jakarta Source:STR Global, CBRE Hotels Source: STR & CBRE Hotels 8 CBRE | CAMBODIA

REVENUE PER ROOM IN USD RevPAR (MAT) United States - Dollar 100 90 80 70 60 50 40 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Hanoi Ho Chi Minh City Bangkok Kuala Lumpur Manila Jakarta Source: STR Global, CBRE Hotels 9 CBRE | CAMBODIA

GROWTH IN REVENUE PER ROOM Local currency RevPAR (MAT) Indexed 150 140 130 120 110 100 90 80 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Hanoi Ho Chi Minh City Bangkok Kuala Lumpur Manila Jakarta Source:STR Global, CBRE Hotels Source: STR & CBRE Hotels 10 CBRE | CAMBODIA

INFRASTRUCTURE 11 CBRE | CAMBODIA

SOME CHALLENGES Political Information Access and cost of finance Security Legal Language People 12 CBRE | CAMBODIA

WHAT MAKES HOTELS WORK OR FAIL? The owner/developer The market The development The operator • Aspirations • Demand • Design • Reputation (guests and owners) • Financial • Competition • Size • Track record • Long or short term • Gap • Facilities • Marketing • Positioning • Cost • Financial • Financials • Flexibility • Relationship with owners All four need to match 13 CBRE | CAMBODIA

HOTEL DESIGN AND OPERATION Some key issues • Needs input from range of skills • Architect • Engineer • Interior Designer • Operator • Project Manager • Quantity Surveyor • Developer They all have different agenda 14 CBRE | CAMBODIA

HOTEL DESIGN AND OPERATION What is appropriate? 15 CBRE | CAMBODIA

HOTEL DESIGN AND OPERATION Some key issues 16 CBRE | CAMBODIA

HOTEL DESIGN AND OPERATION Some key issues • Meet or beat the market • Future proofing • Efficiency v luxury • Essential features • Understanding the guests • Site issues • Operational issues • Feng shui • Market position • Branding • Highest and best use v ego 17 CBRE | CAMBODIA

OPERATOR SELECTION What to look out for • They are experts – most owners and developers are not • Use a lawyer experienced in management agreements • Put them in competition • Key money and sliver equity • Control • Its not just about the management fees • Experience Matching the market, the property, the brand and the owner’s requirements 18 CBRE | CAMBODIA

SOME LESSONS FROM VIETNAM • Rapid Development • Infrastructure • Reliance on a single source of business • Condotels • Build for the future not today • Choose good partners • Quality pays • It will be cyclical 19 CBRE | CAMBODIA

CBRE HOTELS SERVICES HOTEL BROKERAGE & FEASIBILITY STUDIES INVESTMENT SALES Our teams advise on the appropriate development scheme and help optimize returns offering solutions, strategies and For single and multiple asset transactions, CBRE Hotels offers alternatives to strengthen your hotel business decision process. comprehensive capital markets services including acquisition/disposition and advisory across all hospitality OPERATOR SELECTION product segments . Our teams work closely with hotel owners to assess their business and legal requirements in order to select the most appropriate operating structure and brand. INVESTMENT & MARKET ADVISORY LEISURE & ALTERNATIVE We provide advice for existing and prospective hotel owners, INVESTMENTS investors and lenders on the wider hotel industry, as well as specific assets and markets in order to maximize investment We offer unparalleled consultation, brokerage, financing and returns. appraisal services to specialized industries such as golf and resort properties, gaming, pubs, bars and clubs. VALUATION SERVICES PROJECT MANAGEMENT SERVICES CBRE Hotels’ global Valuation teams complete appraisal and Project Management partners with clients to deliver projects advisory work led by MAI, RICS, or appropriately qualified from “concept to completion” by implementing cost efficient, valuers with specialist hotel-sector knowledge. industry leading processes to optimize projects, minimize risk and create value. 20 CBRE | CAMBODIA

Rob McIntosh Executive Director, CBRE Hotels Asia Pacific T +61 2 93333 3250 M +61 (0) 449 587 023 robert.mcintosh@cbrehotels.com