HVS Monday Musings: Indian Luxury Hotel Segment: The Competition is Heating Up!

By Mandeep S Lamba and Dipti Mohan
The Indian luxury hotel segment has been regaining developer interest in recent years due to the evolving market dynamics.

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Oscars Hotel Group Acquires Brisbane Hotel for AUD50 Million

Australia-based hospitality group, Oscars Hotel Group (“Oscars”), owned by brothers Bill and Mario Gravanis, has announced an AUD50 million acquisition of the Oakwood Hotel and Apartments in Brisbane. The site has been offloaded by Singapore-based Mapletree Investments, which purchased it in 2015 for AUD48 million. Located at 15 Ivory Lane, the property consists of 162 keys across eleven floors, a bistro, a business centre, a gym, and a swimming pool. The property currently occupies a corner site area of 2,966-square-metre. Oscars is expected to perform a major revamp on the property to further leverage on its prime location within the popular riverside precinct. In addition, industry experts predict that the flow of capital towards Queensland would continue to grow, in anticipation of the 2032 Brisbane Olympics. This news follows Oscars’ AUD20 million acquisitions of the Long Island in Whitsundays in May 2021, of which, the company has planned to redevelop the property into an upscale resort. To date, Oscars owns over 30 hospitality venues across New South Wales and is expected to continue expanding its market presence in Queensland.

Hong Kong Resumes Quarantine-free Travel for Mainland China and Macau Travellers from 8 September

Hong Kong’s chief executive, Carrie Lam, has announced that from 8 September 2021, travellers who have not visited medium- or high-risk areas on the mainland or Macau can enter Hong Kong. These travellers do not need to be quarantined after receiving negative COVID-19 test result prior to arrival. However, they are obligated to take several tests while in Hong Kong. The number of daily travellers is capped at 2,000. According to Lam, the travel restrictions will ease further from 15 September 2021, where mainland residents will be able to enter the city without quarantine via the Shenzhen Bay port and via the Hong Kong-Macau-Zhuhai Bridge, capped at 1,000 daily visitors each. Similarly, these travellers must produce a negative COVID-19 test result prior to arrival. The moves to ease restrictions is part of the “Come2HK” quarantine-free scheme to boost the economy.

Malaysia Set to Reopen Langkawi Island to Domestic Tourism

Malaysia will reopen Langkawi Island to local Malaysians under a travel bubble plan from 16 September 2021, mirroring Phuket’s Sandbox Program in Thailand. Melaka state will transition to phase 2 of the National Recovery Plan, while Negri Sembilan will transition to phase 3 from 4 September as both places meet the threshold limit in reducing infections. More industrial and economic activities will be allowed, although restrictions such as inter-state travel will still be prohibited. While Malaysia recorded more than 20,000 new COVID-19 cases a day in August, the virus’s effective reproduction rate has fallen below one for the first time in few months. COVID-19 will be treated as endemic in Malaysia as the country speeds up the vaccine rollout. The vaccination rate is expected to reach 80% by the end of September, and subsequently, more tourist destinations will be allowed to operate. The pilot program will allow Malaysia to ease back to recreational activities, and gradually rebuild the national economy which was severely impacted by the pandemic.

Taiwan Issues NTD5,000 Stimulus Vouchers to All Residents

Taiwan government will give out NTD5,000 (USD180) stimulus vouchers to all residents to encourage consumption activities and boost the local economy, after experiencing a decline in private consumption due to the spikes in domestically transmitted COVID-19 cases in the previous months. It is hoped that the stimulus vouchers could help businesses that are severely affected by the stringent COVID-19 restrictions, including hotels, taxi drivers, small merchants, and food vendors. The stimulus vouchers can be obtained and used earliest from October 2021 to end April 2022. The government has reserved NTD120 billion (USD4.3 billion) to fund the scheme, and procedures to obtain the stimulus vouchers have been simplified.  Unlike the first stimulus round, residents are not required to pay NTD1,000 in order to obtain the stimulus vouchers. Residents could also enter a nationwide lottery if they decide to collect the vouchers digitally. The Taiwan cabinet has increased the gross domestic product growth forecast for 2021 to 5.88% this month, driven by strong export demand.

Absolute Share Price Performance, as on 10 September 2021