SINGAPORE: The Ascott Limited has shared its business strategy at the CapitaLand Investment Investor Day 2022.
During the event, which was attended by more than 200 institutional investors, bankers and market analysts, key figures offered panel discussions and insight into Ascott’s business strategy.
In one discussion “Riding the Wave of Travel Recovery and Beyond”, Ascott presented its lodging investment management strategy.
Kevin Goh, CEO, CLI Lodging and The Ascott Limited said: “The recovery of the lodging sector has accelerated alongside the rapid lifting of travel restrictions starting second quarter of 2022. At the end of the third quarter, Ascott’s revenue per available unit was pacing close to pre-pandemic levels in 2019. We expect our serviced residences, which has the flexibility to cater to both short- and long-stay customers, to further bolster revenues. Beyond the initial travel rush, growth of the hospitality sector is on a positive and sustainable trajectory.”
Ascott’s portfolio of brands spans varying lodging options including serviced residences and aparthotels, hotels and coliving concepts. As its brand portfolio expands for continued growth it has embarked on a group wide exercise to strengthen its brand portfolio. This includes the Citadines brand refresh, unveiled last month.
The Ascott brand and The Crest Collection will also be rolling out new brand signatures and programmes in 2023.
Other key moments during the day included Ascott outlining the strategic thrust of its lodging business to enter a phase of accelerated asset-light growth.
Main points included:
The investment management engine is anchored by the listed CapitaLand Ascott Trust (CLAS) and its private funds, while the lodging management engine powers the growth of room units across its portfolio of product brands. Harnessing the synergy of its owners’ network, strong product branding and in-depth local expertise, Ascott is well-positioned to scale fund and lodging management fees.
Focusing on asset-light growth: Ascott is embarking on an increasingly asset-light growth, with over 80 per cent of its properties currently signed under management and franchise contracts, up from 39 per cent in 2011. The long contract duration, for 10+10 years, helps to build a stable recurring income stream for Ascott. In the first half of this year, Ascott signed more than 7,500 new rooms and opened over 4,500 rooms. With the acquisition of Oakwood, it has achieved a healthy net room growth of 15 per cent.
Accelerating growth through strategic mergers and acquisitions. The acquisition of Oakwood in July gave an immediate boost to the group’s portfolio, expanding its global presence to more than 150,000 units in about 900 properties across over 200 cities. This follows a string of prior strategic investments which include the acquisition of Quest Apartment Hotels and substantial investment in Synergy Global Housing – both in 2017. In 2018, Ascott acquired TAUZIA Hotel Management (TAUZIA).
Playing to the strengths of Ascott’s dual-engine business model, the lyf brand was created to appeal to the next-generation travellers. The brand has gained much traction in the coliving space since its debut in 2019. Now with 21 lyf properties and 13 more under development, Ascott is confident of lyf’s strong potential and is targeting to sign 150 lyf properties by 2030.
Goh said: “Ascott has a resilient and differentiated business model and we will continue to build on our strength as an integrated lodging player across the real estate value chain. Our portfolio of brands caters to different types of travellers, from short stay to long-term guests and our strategy is to focus on unlocking their full value potential. From 2017 to 2021, Ascott has had five consecutive years of record signings, in spite of COVID. We are keeping pace in 2022 as well. Ascott is on track to achieving its target of 160,000 units globally by 2023.”
Tan Bee Leng, Ascott’s managing director for brand and marketing added: “Post-pandemic, Ascott’s flex-hybrid model not only allows us to offer the option of both hotel rooms and serviced residences, but also enables us to design robust brand programmes that better cater to the various lifestyle needs of our guests, and have proven to be much sought after. Ascott is therefore bullish on the conversion trend, as we are seeing the potential of more assets coming into play. In our Brand360 exercise, brands such as Citadines and The Crest Collection have been designed to be “conversion-friendly” because they require less structural work to switch.”
