Set to expand beyond serviced residences and apartments for corporate lease to advance in business hotel segment.
CapitaLand’s wholly owned serviced residence business unit, The Ascott Limited (Ascott), is advancing in the fast-growing middle-class business hotel segment by investing about US$26 million for a 70% stake in TAUZIA Hotel Management (TAUZIA). This is Ascott’s first major move into the lodging segment beyond its core serviced residence business and existing business in apartments for corporate lease.
TAUZIA is one of Indonesia’s top five hotel operators. With its investment in TAUZIA, Ascott will get an instant boost of close to 20,000 units spanning 122 hotels across Indonesia, Malaysia and Vietnam, half of which are under development. This puts Ascott’s portfolio at over 94,000 units globally, surpassing its 2020 target of 80,000 units well ahead of time.
Mr Kevin Goh, Ascott’s Chief Executive Officer, said: “While Ascott’s serviced residences continue to see strong demand from expatriates and corporate travellers, we can capitalise on significant opportunities in the middle-class business hotel segment which is expanding at an unprecedented rate. This is brought on by the rise of the gig economy, super commuters, infrastructure builders, other project-based workers, and tech-savvy, self-sufficient, and value-conscious leisure travellers. With our investment in TAUZIA, we look forward to accessing this market, which is one of the fastest growing segments of the hotel industry.”
“We are also looking to expand beyond serviced residences where we can leverage Ascott’s over 30 years of experience managing properties globally. Scaling up the lodging business will allow Ascott to address these new segments of customers by widening our offering of products and services. Together with our earlier platform investments in Synergy Global Housing and Quest Apartment Hotels, increasing the scale of our business will allow us to achieve greater synergies in cross-selling and operational efficiencies as well as better customer outreach; essentially anchoring Ascott’s position as a dynamic chain player in the lodging industry.”