Ascott (Singapore) Expands Global Presence with 26 New Property Agreements
18 Jul 2019 - Singapore-based Ascott, a leading international lodging owner-operator, is accelerating its growth globally with the signing of 26 properties, including in Saudi Arabia.
The properties, which will open in phases from 2019 to 2023, are mostly signed under management contracts, with three on franchise agreements.
Kevin Goh, Ascott’s chief executive officer, said: “We are fast-expanding Ascott’s global network of properties as we continue to pursue an asset-light business model to boost our recurring fee income. While we achieve strong momentum in expanding our global lodging business through strategic alliances, management contracts, franchise and leases, we are also accelerating the number of new property openings. For the first quarter this year, our operational units have contributed S$59.7 million ($44 million) of fee income. We are targeting to open over 40 properties with about 8,500 units this year. For every 10,000 serviced residence units signed, we are expecting to earn approximately S$25 million ($18.4 million) in fee income annually as the properties progressively open and stabilise. Through these growth strategies, we are looking forward to the fee income boost when we achieve our target of 160,000 units worldwide by 2023.”
In the Middle East, Africa and Turkey region, Ascott Corniche Al Khobar is scheduled to open in Q3 this year, followed by four new Ascott properties in Saudi Arabia in 2020: Somerset Downtown Al Khobar, Ascott Villas Riyadh, Somerset Corniche Jeddah and Citadines Abha. The recently announced Citadines Al Aziziyah Al Kohbar signing is slated for opening in Q4 2021.
The majority of the 26 new properties are in Asia Pacific, which continues to see strong demand for lodging in tandem with lower cost of travel, improving travel infrastructure and middle-class demographics’ growing disposable income and aspiration to travel. By 2022, global lodging sales are forecast to reach $812 billion, with Asia Pacific remaining the second-largest market. International tourist arrivals continue to be driven by stronger economic growth, more affordable air travel and a better visa regime.
With these new properties, Ascott has made inroads into six new cities across Asia Pacific, Central Asia and Africa. It has forayed into Atyrau in Kazakhstan, Yokohama in Japan, Seongnam in South Korea, as well as Cam Ranh and Hoi An in Vietnam. Ascott has also expanded its presence in 14 cities – Melbourne and Sydney in Australia; Chengdu, Dongguan, Guangzhou, Shanghai, Shenzhen, Wuhan and Xi’an in China; Bogor and Jambi in Indonesia; Cyberjaya in Kuala Lumpur; Cebu in the Philippines; and Bangkok in Thailand.
To cater to the burgeoning middle-class segment in the region, Ascott expanded its select-service business hotel brand Citadines Connect to Bangkok in Thailand, after Sydney in Australia and New York in the US. Ascott also brought the hotel brands under Tauzia, which it has a majority stake in, to countries such as Malaysia and Vietnam, beyond its predominantly Indonesia market. Ascott also signed its fifth Citadines property under its strategic alliance with Nasdaq-listed Huazhu Hotels Group (Huazhu) and Huazhu’s subsidiary CJIA Apartments Group.
In addition to expanding its global footprint, Ascott is strengthening its international marketing network with Ascott Star Rewards – the world’s first loyalty programme in the serviced residence industry to offer full flexibility to earn and redeem points. Member bookings have quickly tripled since the loyalty programme was launched in April 2019. Members of Ascott Star Rewards have a greater choice of properties across the globe as Ascott has opened 16 properties this year, with more than 30 properties scheduled to open for the rest of 2019. Ascott is also gearing up for the opening of its flagship coliving ‘lyf’ property – lyf Funan Singapore – in the city-state’s Civic and Cultural District in September.
To date this year, Ascott has signed contracts for over 40 properties with more than 8,000 units, an increase of over 40 per cent in units compared with the same period in 2018. Ascott has also opened 16 properties with over 2,000 units, a 70 per cent increase in operational units compared with 2018.
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