New signings of over 4,000 units in 1Q propel Ascott to exceed current target of 160,000 units.
SINGAPORE – The Ascott Limited (Ascott), a lodging business unit wholly owned by CapitaLand Investment Limited (CLI), has achieved its target to secure 160,000 units by 2023, with the signing of over 4,000 units in 1Q this year. Sharpening its focus on quality growth, Ascott is renewing its target to double fee revenue to more than S$500 million in the next five years. The fee revenue target is set off the FY 2022 base of S$258 million – the highest earnings on record for Ascott. Fee revenue from the lodging business increased by 36% year-on-year (y-o-y) in FY 2022 on the back of record signings and property openings. This demonstrates Ascott’s strength as a key contributor of fee-related earnings to CLI’s overall business.
Ascott also achieved a record net room growth1 of 20% in FY 2022, underpinned by its acquisition of Oakwood which added about 15,000 units to its portfolio, of which approximately 8,000 are operational units that contributed to its fee revenue. In the last five years, Ascott has rapidly grown its operational units from more than 56,000 units in 2018 to over 95,000 units in 2022. This year, it expects to open more than 13,500 units in over 70 properties. Ascott will continue to expand its product offerings spanning a portfolio of serviced residence, hotel, coliving and senior living brands, positioned from mid to luxury scale. Fee revenue growth will be driven by new property openings as well as new signings at an expected annual net room growth rate of 8-10% in the next five years.
Mr Kevin Goh, Chief Executive Officer for Ascott and CLI Lodging, said: “With our asset-light strategy, Ascott has doubled in units every five years, growing from about 20,000 units in 2008 to over 160,000 units today. We are now seeing the positive financial impact of growing our portfolio by eight-fold and will focus on driving even stronger fee growth over the next five years. Over 80% of our total units are under management and franchise contracts, up from 43% ten years ago. These management and franchise contracts typically have sticky recurring fee revenue and long tenures.”
Ascott also demonstrated strong operating performance in FY 2022, with a 40% y-o-y increase in revenue per available unit (REVPAU) with the recovery of international travel. Ascott is riding on this momentum to further optimise the performance of its operational portfolio.
Notable resources have been deployed for a global Brand 360 exercise to position its suite of brands to cater to a diverse range of guests across different age groups with varying sets of expectations. It seeks to strengthen Ascott’s portfolio through sharpened brand stories and elevated signature experiences and programmes unique to each brand. Brand 360 initiatives rolled out have resulted in higher customer satisfaction rates, positive reviews, and increased loyalty. Launched in the latter half of 2019, Ascott’s loyalty programme – Ascott Star Rewards (ASR) has also grown exponentially despite the onslaught of COVID-19. In 2022, ASR membership grew 36%, with member revenue increasing five-fold from 2021.
“To achieve our new growth target, we will secure more management and franchise contracts for prime properties that generate higher quality fees; and leverage our strong brand equity and direct distribution channels to deliver greater value to property owners and customers. Ascott’s suite of award-winning hospitality brands and products has the flexibility to cater to both long- and short-stay customers across different market segments. In addition to ramping up the opening of our properties, we will be stepping up efforts to upgrade several of our strategically located properties into brand flagship assets. Properties in the pipeline for these asset enhancement initiatives include The Robertson House by The Crest Collection in Singapore, The Cavendish London and Citadines Saint-Germain-des-Prés Paris, which will be re-branded under The Crest Collection.”
“Besides powering growth organically, we will also actively seek strategic merger and acquisition opportunities to accelerate our ambition to be a significant global player in the lodging space. With vertically integrated capabilities, we can also leverage our strong investment and asset management capabilities to expand through our sponsored lodging trust and private funds,” added Mr Goh.
Building on Ascott’s sixth consecutive year of record signings and openings
In 1Q 2023, Ascott added over 4,000 units across 20 properties in cities including Shanghai and Shenzhen in China; Bali and Gorontalo in Indonesia; Fukuoka and Osaka in Japan; Kuala Lumpur and Penang in Malaysia; and Chonburi in Thailand. Ascott’s continued growth momentum this year builds upon its record growth of about 33,000 units across 160 properties in 2022.
Ascott expanded its presence in key cities including Vienna in Austria; Chengdu, Chongqing, Guangzhou, Sanya, Shanghai, Suzhou, Xi’an and Zhuhai in China; Goa in India; Jakarta in Indonesia; Penang in Malaysia; Ho Chi Minh City in Vietnam; Bron in France; Djibouti in Africa; Antalya in Turkey; and Al Khobar in Saudi Arabia. These properties, slated to open between 2023 and 2028, are primed to meet the growing demands from business and leisure travellers as economic activities, urbanisation and foreign direct investments increase.
Riding on the recovery of international travel, Ascott also achieved its highest-ever property openings in 2022, launching more than 9,300 units across 45 properties. This includes the launch of lyf Collingwood Melbourne, Ascott’s first lyf coliving property to open in Australia; Ascott Huaishu Road Ningbo, Ascott’s first operational property in China’s bustling port city; Oakwood Residence Foshan, Ascott’s first Oakwood-branded property in one of the largest cities in the Pearl River Delta Economic Zone; and Somerset Pattaya, Ascott’s first property to open in Thailand’s thriving resort city.
Ascott also opened Citadines South Vienna and Somerset Westview Nairobi, its first property in Austria and Kenya respectively. In Singapore, Ascott opened four properties comprising lyf Farrer Park Singapore, Citadines Raffles Place Singapore, Citadines Connect City Centre Singapore and Citadines Connect Rochester Singapore.
In the first three months of 2023, Ascott opened more than 920 units in six properties. This includes Ascott Dadonghai Bay Sanya, which is located in a popular tourist destination in China.
With the relaxation of travel restrictions in China, customer enquiries have increased significantly and average daily reservations volumes for Ascott’s properties in China grew by about 150% in March 2023 compared to December 2022. As the frequency of flights continues to normalise and return to pre-pandemic levels, Ascott is well-positioned to capture China’s inbound and outbound demand.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.