CONFERENCE REPORT
Hotel Investment Conference Asia Pacific 10-12 October 2012 – InterContinental, Hong Kong
Report by Rebecca Lo
At the 23rd annual edition of Hotel Investment Conference Asia Pacific held at InterContinental Hong Kong, the overall mood was buoyant. With Asia leading hotel development growth worldwide, the region’s gravity defying feats continue to astonish. The conference echoed these sentiments. After deviating for years after the 2008 economic downturn with discussions about branding, design and other soft aspects of hotel development, HICAP 2012 could have been dubbed: “show me the money.” Most telling were the HICAP
awards, held during the closing lunch on 12 October. The Reggie Shiu Development of the Year went to Palace Hotel in Tokyo, Single Asset Transaction of the Year to the acquisition of Shangri-La Sydney by Shangri- La Asia from GIC Real Estate and Merger & Acquisition Deal of the Year to Pegasus Capital’s purchase of Six Senses Resorts & Spas. These deals show that homegrown brands such as Six Senses are coveted internationally, while Asian companies such as Shangri-La are flexing their global muscles by taking more control. Sustainable properties got their proper share of the limelight with Jetwing VIl Uyana in Sri Lanka, Radisson Blu Resort Temple Bay in India, Anantara Golden Triangle Resort & Spa and Song Saa Private Island in Cambodia all picking up accolades.
HICAP founder Robert Stiles
welcomed the 800 attendees and delegates attending by stating that Asian hotel development was still “firing on all cylinders” despite a number of “black swans circling”. He noted that while development was well-covered and investment continues to broaden, “finance is lagging behind and tends to focus on recourse.” Christopher Pockette of
Tabor International followed with his discussion topic Regional Political and Economic Uncertainty. “The most dangerous variable is between the ears: the gap between what we think we know versus what we actually don’t know,” he says. He cautioned that the main regional political issues with the potential to affect development are depleting hydrocarbon reserves, fisheries claims and sovereignty disputes – and that they are all happening simultaneously. STR Global’s Jonas Ogren was on hand to talk numbers with his Hotel Performance and Outlook. This year, Asia Pacific growth has rebounded from 2011’s tsuanmi, though he notes that China’s growth is fairly flat in comparison to Southeast Asia, which is growing by 11%. As expected, Shanghai has suffered after the Expo 2010 boom, while Jakarta is experiencing the highest growth rate in the region. “Singapore is head to head with Hong Kong, leading the region in revPAR at US$233,” Ogren states. Rooms coming online in the next few
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years will see the biggest jump in the four star upscale category, with 30% of the share. Countries under the
investment spotlight this year included Australia, Myanmar and India. Andrew McEvoy of Tourism Australia underscored that his country commands the most in terms of individual spending per visitor, with more beds required in capital cities. “Regionally, we are looking for better quality, not volume,” he says. Perth is experiencing strong occupancies and is second only to Brisbane. Myanmar is coming from the other end of the spectrum, with 50% growth in 2012 mostly in the four-and five-star categories. “We need to upgrade hotels in response to demand,” says Kyi Kyi Aye of Myanmar Tourism Federation. The recent easing of sanctions by the US and EU are fostering a healthy development climate. Tony Picon with Colliers International believes that the country is “like Thailand forty years ago. The country is more resilient and there is more confidence. People are coming back to spend time outside the capital.” India, on the other hand, continues to be challenging. “It’s a tough market,” acknowledges Mihir Thacker of Silverneedle Hospitality. “Regulatory challenges are great and most Indian owners don’t understand what it takes to build a hotel. We end up building as we go, as
properties aren’t funded correctly from the start.” The panelists all agree that the best funding comes from private equity or personal wealth: investors in the project for the long haul.
Breakout session Rise of Asian Hotel Brands was a lively discussion well attended by delegates such as Mark Edelson and others instrumental in helping shape an international image of Asian hospitality. Sense of place, Asian service spirit and the focus on guest experience are all part of the Asian DNA that became the core of most homegrown brands. “The guest is god,” says Sonu Shivdasani of The Soneva Group. “It goes back to the concept that it’s a privilege to have a guest in the home.” Marc Dardenne of Patina Hotels & Resorts adds that it’s about finding the right employees who naturally have big hearts and fit well with the brand. Ivanka Trump added a sparkle of celebrity glamour at a luncheon held on 11 October. “Great partners are keys to prudent growth,” she says, commenting on The Trump Organization’s properties in The Philippines and India. While she admits that her company is a personality-driven brand, she takes her responsibilities seriously. Trump’s commitment to the region is underscored by a branch office soon to be open in Shanghai: “China is our priority in Asia,” Trump concludes.
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