THE consolidation fervour that has hit the industry with the recent Marriott/Starwood, Accor/Fairmont and Commune/Alila/Destination Hotels & Resorts M&As is expected to flow on to ASEAN hotel groups.
Eric Levy, managing director of Tourism Solution International (TSI), said it was “inevitable” that consolidation would soon involve ASEAN region’s local hotel groups. Even financially strong, privately held companies such as Carlson Rezidor Hotel Group were being speculated in the news as exploring “strategic options”, he said.
TSI has been involved in numerous discussions with regional groups that are reviewing opportunities for inorganic growth outside their traditional markets. “Thus, while the global players will get the big headlines, we at TSI expect to see intra-regional consolidation to pick up pace as well,” he said.
During a panel session at the recent 5th Thailand Tourism Forum in Bangkok chaired by Levy, one of the panellists, Suparat Chirathivat, vice president business development at Central Hospitality International, said: “I think you will see acquisitions/mergers with regional operators (who are) trying to compete against the big players. We look for opportunities like this.”
Another panellist, Faez Jumabhoy, managing director & head of Real Estate Finance Investment Banking, CIMB Group, said: “In Asia, we are looking at mergers and acquisitions happening in the next 24 months. People are looking for lower risk capital markets, such as REITs, so there will be consolidation (across borders)”.
Levy added there was great opportunity for international operators to gain exposure to Asian markets through M&As of small, more locally-adapted management companies.
“Without a doubt, regional players will be involved in (consolidation) as Asia will continue to be the world’s most active growth market for the industry.
“I expect to see regional players involved in consolidation within the region, and further that global companies’ consolidation efforts will include regional players,” he said.
But the industry won’t end up having just a handful of mega hotel groups.
“Far from it,” said Levy. “Just as there remains many great independent hotels today, different categories of owner/operators, owners of hotels that employ third-party managers and travel trends of millennials will maintain the demand for true independent properties and intimately-sized hotel groups.
“Evolving technologies will enable these properties and hotel groups to serve the niche of the market that prefers the non-mainstream market and I do not see them going away. Many will thrive in the coming decades.”
