Radisson Hotel Group and Panorama Group are parting ways in their Indonesian joint venture partnership, ahead of its anticipated life span.
The hotel group, formerly Carlson Rezidor Hotel Group, entered an agreement with Panorama Group in 2013, leading to the creation of Carlson Panorama Hospitality in Indonesia.
The partners had initially planned to have 20 Radisson and Park Inn by Radisson hotels developed in Indonesia over seven years.
Radisson Hotel Group currently operates three hotels in Indonesia: Radisson Blu Bali Uluwatu, Radisson Golf & Convention Center Batam and Radisson Medan. Radisson Lampung is slated to open in 2Q2019.
With the end of the partnership, Radisson Hotel Group will acquire Panorama’s stake in Carlson Panorama Hospitality, giving it full control of the venture.
In a joint statement, the partners said the decision to go their separate ways was reached amicably by the shareholders to allow the groups to “align better with their respective business strategies” and focus on their core activities.
“Our partnership has seen the expansion of our footprint across the Indonesian archipelago, establishing our brands in important markets,” said Katerina Giannouka, president, Asia Pacific, Radisson Hotel Group. “Panorama Group is one of Indonesia’s leading tourism companies and we intend to retain a strong working relationship with the group.”
Budi Tirtawisata, CEO, Panorama Group, commented: “Our partnership with Radisson Hotel Group over the last five years has garnered mutual success. As we move forward as independent companies, all signs indicate accelerated growth and expansion for both parties.”
With 46 years of experience and more than 100 offices, Panorama Group is opening offices in Malaysia and Thailand, and intends to further expand its business to Vietnam and other potential countries in South-east Asia.
With lower fuel prices and strong economic growth, the global airline industry net profit is expected to hit US$35.5 billion in 2019, slightly ahead of the US$32.3 billion expected net profit in 2018 which saw profitability squeezed by rising costs, according to IATA forecasts.
It is expected that 2019 will be the 10th year of profit and the fifth consecutive year for airlines to deliver a return on capital to investors.
“We had expected that rising costs would weaken profitability in 2019. But the sharp fall in oil prices and solid GDP growth projections have provided a buffer. So we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year. But there are downside risks as the economic and political environments remain volatile,” said Alexandre de Juniac, IATA’s director general and CEO.
The 2019 industry outlook is based on an anticipated average oil price of US$65 per barrel, lower than the US$73 recorded in 2018, following the increase in US oil output and rising oil inventories.
Fuel is expected to account for 24.2% of the average airline’s operating costs, an increase from 23.5% forecast for 2018.
Meanwhile, passenger traffic (RPKs) is expected to grow 6% in 2019, outpacing the forecast capacity (ASKs) increase of 5.8%, and remains above the 20-year trend growth rate. This in turn will increase load factors and support a 1.4% increase in yields. Passenger revenues, excluding ancillaries, are expected to reach US$606 billion (up from US$564 billion in 2018).
Asia-Pacific carriers are expected to report a US$10.4 billion net profit in 2019, up from US$9.6 billion in 2018, with net profit per passenger projected to be US$6.15 (3.8% net margin). Lower fuel costs, low levels of fuel hedging and strong regional economic growth are supporting profitability in 2019 in this region, according to IATA.