HVS Monday Musings: Reimposing Lockdowns is a Blow to the Indian Hotels Sector

By Mandeep Lamba, Akash Datta and Dipti Mohan
In the last few weeks, demand for domestic leisure tourism has improved in India, which is a silver lining for the distressed and vulnerable Indian hotels sector. However, sudden changes in regulations are adding to the sector’s woes and may dampen the spirits going forward.

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STB Signs Three New Partnerships to Boost MICE Sector

The Singapore Tourism Board (“STB”) has signed three memorandum of understandings (“MoU”) with prominent international event organisers at TravelRevive, a new hybrid tradeshow by STB and ITB Asia. Held from 25 to 26 November 2020 in Marina Bay Sands, TravelRevive represents the first tradeshow to take place physically in Asia Pacific during the covid pandemic. The new partnerships demonstrate international organisers’ confidence in Singapore as a global MICE hub and a launchpad to expand regionally. The first one-year MoU was signed by the Infocomm Media Development Authority (“IMDA”), STB and B2B event organiser, Informa Tech, to launch an international technology event in the second half of 2021. The event will be a platform for governments and businesses in the infocomm, media and tech ecosystem to discuss on topics related to digital transformation and innovation. STB also signed another one-year MoU with Messe Munich and a three-year MoU with Fiera Milano, both of which will be establishing Southeast Asia Regional Headquarters in Singapore. With the partnerships in place, they are expected to boost Singapore’s MICE industry through creating new international networks and growing new best-in-class events. STB’s Deputy Chief Executive mentioned that growing existing partnership and forging new ones will be the key to emerge from the pandemic stronger and more resilient.

Tourism Vouchers Rolled Out in Indonesia to Encourage Local Spending

On 24 November 2020, Indonesia’s Ministry of Tourism and Creative Economy announced a new incentive programme dubbed “Big Promo”. This programme seeks to ride on the upcoming holiday season and drive domestic visitors towards tourist attractions in twelve locations across Indonesia, including Belitung Island, Yogyakarta, Bali, Lombok, and Manado. Valid through year-end, domestic visitors can redeem vouchers when they make a purchase of various subsidised packages listed on the Big Promo website. The 50,000 vouchers comprise of IDR225,000 vouchers that can be spent on staycations, tours, attractions; IDR100,000 as meal vouchers; and IDR75,000 as shopping vouchers. This programme is one of the various initiatives employed by the government to support the tourism sector by buffering the economic impacts of the pandemic.

Malaysian Government Approved Green Zone Domestic Travel Bubble Initiative

The Malaysian government has approved a domestic travel bubble programme which begun on 22 November 2020. The green bubble initiative allows for unrestricted travel within all “Green Zone” states. A green zone is an area with no new COVID-19 cases within the past two weeks. The current states that are under the green bubble include Perlis, Pahang, Sarawak, Kedah, Melaka, Terengganu and Johor, except for certain districts. On the other hand, the recovery plan seeks to leverage current resources and restore confidence in domestic travelling. This is achieved by collaborating with numerous tourism-related firms, airlines companies and organisations such as the Malaysian Association of Hotels and Malaysian Budget Hotel Association. In support of these initiatives, the national flag carrier, Malaysia Airlines, has begun offering subsidised airfares, and is optimistic that domestic tourism would rebound quickly under the recovery plan. Malaysia has been focused on the revival of its domestic tourism economy since the lifting of its Movement Control Order and has since allocated RM200 million in its 2021 Budget to further cushion the impact of the coronavirus epidemic.

Destination Capital Launches Green Hotel Fund

Thailand-based private equity real estate investment company, Destination Capital (“DC”), has announced the launch of the world’s first green hotel fund, Descap I. The acquired hotels under the fund will utilise EDGE sustainability systems and procedures in order to support long term environmental sustainability and the financial viability of the investments. EDGE is an online platform, a green building standard, and a certification system for more than 170 countries. Descap I has indicated an objective to raise capital and financing to acquire freehold four-star hotels in prime destinations in Thailand. Some of the hotels will be rebranded to elevate positioning and value to generate potential investor returns. DC sees this as an opportunity to differentiate their hotel products and in offering hotel guests a better experience in a safe and hygienic environment post-COVID-19.

Absolute Share Price Performance, as on 27 November 2020