Hotel industry and travel news from around the Asia Pacific region: Pro-invest Group launches distressed asset fund, Thai AirAsia to restart all domestic routes and more...
NRMA Acquires RACT Hotels and Tourism Services for AUD160 Million
Australia-based National Roads and Motorist Association (“NRMA”) has announced its acquisition of several tourism businesses from the Australia-based Royal Automobile Club of Tasmania (“RACT”). The AUD160 million acquisition consists of two prominent hotels within Tasmania, the 60-key Freycinet Lodge and the 60-key Cradle Mountain Hotel, and tourism services including the Strahan Village and Gordon River Cruises. The assets will be paid by cash, with the company deploying part of its AUD1 billion funds that has been set aside for the acquisition of Australian tourism firms. The company stated that it plans to spend millions to improve these assets in the next two to three years. This move is part of NRMA’s plan to establish its new division, NRMA Expeditions. According to NRMA Expeditions CEO, Rachel Wiseman, the new division strives to deliver high quality experiences in natural environments. The sentiment is reciprocated by RACT Group Chief Executive Officer, Mark Mugnaioni, who agreed on revamping tourist experiences to meet consumer demands. Prior to this acquisition, the NRMA’s tourism investment portfolio was valued at AUD800 million and consists of a network of holiday parks across Australia, and a 46% minority stake in the Australia-based Great Barrier Reef cruise company, Coral Expeditions.
Pro-invest Group Launches Distressed Asset Fund to Capitalise Opportunities from Travel Recovery
Australia-based asset management and investment firm, Pro-invest Group (“Pro-invest”), has launched the Pro-invest Asia-Pacific Distressed Hospitality Fund (“Fund III”). Pro-invest aims to raise AUD500 million from institutional investors, sovereign wealth funds and family offices to invest in luxury, upper-upscale and upscale full-service hotels. In doing so, they hope to prop up the sector and provide operating capital as it rebuilds from the pandemic, especially after international borders reopen. The group believes that unprecedented market conditions created by the pandemic have created an opportunity to make value-added investments in these income-producing high-end assets. Outside of Australia and New Zealand assets, Fund III will seek Asian opportunities in Singapore, Japan, South Korea and Thailand. These higher-end assets experience higher revenue declines during market downturns, but will typically enjoy higher growth rates during market recoveries. Fund III will focus on acquiring hotels in markets with high barriers to entry and attractive supply-demand fundamentals. The group sees that there is the possibility to acquire assets below replacement cost, providing further upside for investors. Currently, Pro-invest is managing more than USD2 billion in real estate assets, including commercial assets as well as hotels operating under well-known brands like Holiday Inn Express, Hotel Indigo and voco.
Thai AirAsia to Restart All Domestic Routes
Malaysia-based low-cost carrier, AirAsia Berhad (“Airasia”), has announced plans to resume operations across all 40 domestic routes in Thailand from April, including the reinstatement of 14 regional routes from its hubs across the country. Beginning 1 April 2021, AirAsia will be increasing the frequency on popular routes, such as routes from Don Mueang Airport to Chiang Mai, Phuket, Hat Yai, Surat Thani; as well as the restoration of five routes from Suvarnabhumi Airport to Chiang Mai, Nan, Phuket, Hat Yai and Nakhon Si Tham. AirAsia Thailand CEO Santisuk Klongchaiya stated that the recent “#FlyRuaRuaPass” showcases the pent-up demand for air travel in Thailand and is very confident about the tourism industry revival in the country. This news follows the progressively planned reopening of several states in Thailand, where Koh Samui and Phuket has launched plans to allow inoculated foreign visitors to skip quarantine from 1 October 2021. The Thai government is expected to approve plans to recognise vaccine passport within the month and aims to reduce the mandatory quarantine periods for vaccinated tourists to seven days from the current 14 days.
Malaysia Announces MYR20 Billion Stimulus
Malaysia’s Prime Minister, Muhyiddin Yassin, has unveiled a MYR20 billion (USD4.8 million) economic stimulus package, People and Strategic Empowerment Programme (“Pemerkasa”). Pemerkasa is the sixth stimulus package announced in response to the pandemic. Targeted assistance to the tourism sector consists of an extension of tourism tax and service tax exemptions on hotel accommodation until the end of 2021, while tourism companies can also defer their monthly income tax instalments from 1 April to 31 December 2021. The state will also give a one-off special assistance grant of MYR3,000 to registered tourism businesses. Additionally, the scope of special relief on individual income tax of up to MYR1,000 will be expanded to include travel packages purchased from the tourism ministry. Furthermore, the special 10% discount on electricity bills for hotels and theme park operators, convention centres, shopping malls, local airline offices and travel and tour agencies, will be further extended till 30 June 2021. Meanwhile, Muhyiddin has also stated that the government will no longer impose a blanket Movement Control Order (“MCO”) and instead implement a more targeted containment strategy to reduce the negative economic impacts. The government has also increased the budget for the COVID-19 immunisation programme from MYR3 billion to MYR5 billion, with the target to achieve herd immunity by December 2021.