Australians Increasingly Traveling Abroad

China’s southern city of Shenzhen has three neighborhoods that are the latest to be locked down due to the spread of Covid. One of those is Huaqiangbei, a busy shopping area home to thousands of stalls selling computer components, mobile phone parts and microchips. The lockdown in the three neighborhoods in Futian district, right now is for four days. Shenzhen reported a total of just 35 cases. Metal barriers, some topped with barbed wire, were erected outside some residential buildings to stop people from leaving. The districts of Luohu and Longgang also shut down all entertainment venues and public parks, banning gatherings from conferences and performances to square dancing. A Shenzhen official warned that the upcoming period would be the most stressful, high risk and grim period for epidemic prevention and control in the city. We’d ask how that is all working out for China, but you all know the answer already. It isn’t just Shenzhen as Sichuan reported a resurgence of the virus with 205 infections reported today.

June data from the Australian Bureau of Stations reveals outbound travelers are growing at almost three times the rate of inbound as Australians continue to flock overseas. A recent article suggested the building boom in hotels is continuing, despite these statistics, as builders believe that the original reason for this expansion, 1.3 million Chinese inbound tourists, is still valid. So far a strong domestic market is ensuring hotels survive and in some cases thrive. The problem is will it be enough for all the new supply? JLL said Melbourne is leading the growth with more than 2,500 new rooms under construction, followed by Sydney with 1,639 rooms and Brisbane with 1,386 rooms being built. JLL said transaction activity remains brisk as well. They feel there are bigger issues facing the industry than the lack of Chinese visitors with JLL naming the increasing cost of debt and considerable labor shortages. Tourism Accommodation Australia is worried about the continued Chinese policies as they call the loss of the China market a blow to the industry. The room rates are saving the day, driven by the voucher program, but are concerned that the government scheme won’t be there forever and once they have to rely on international tourists, room rates will have to come down. India is at the top of the hit list for tapping new markets for visitation. Prior to the pandemic, India was Australia’s fastest-growing market for visitor spend.

Macau’s hotel occupancy rate fell by -25.6 percentage points year on year on July to 38.1%. That was down a percentage point from June. Five-star hotels took the biggest hit in July with average occupancy falling by -42.2 percentage points to 21.4%. There were only 309,000 hotel guests in July, down -55.6% year on year. The fall was due to the Covid outbreak, but it was not like pre-outbreak the results were anywhere near the 93.4% occupancy rate hotels enjoyed in July 2019. The good news is at least Macau is not a ghost town anymore as daily Macau visitation rose to an average of 14,737 visitors per day from August 20 to 26, up 18% from the previous week. The highest daily total in the month was hit Saturday August 27, when 18,000 visitors showed up. The Macau Government Tourism Office is hoping visitor arrivals can reach between 20,000 and 40,000 a day before the October 1 Chinese National Day holiday. Given the trend in outbreaks in China and the subsequent lockdowns being imposed, we are sure we are not the only ones just waiting for the other shoe to drop and for Macau to remain open but their primary feeder markets to get a case or two and be locked down just before Golden Week. In the US we call that Murphy’s Law.

Artyzen Hospitality Group has five projects in Shanghai: lifestyle hotels, conference centers, and serviced apartments, all slated to open by the end of 2022. By 2023 they are expecting to be operating 19 projects, covering both the Chinese and international markets with more than 50% in Shanghai. Their two flagship properties – Artyzen NEW BUND 31 Shanghai and Artyzen Singapore will be opening by mid-next year. On September 1, 2022, the 210-room Shang by Artyzen and 246-room Artyzen Habitat Qiantan Shanghai are expected to open. That will be followed by the October 1 openings of the 305 room Artyzen Lingang Shanghai, 364 room Artyzen Habitat Lingang Shanghai and Lingang Xinchen International Conference Center and the 128 serviced apartment Eature Residences Lingang.

Best Western Hotels & Resorts announced the opening of a new hotel located close to Bangkok’s Don Mueang International Airport. Best Western Nada Don Mueang Airport Hotel in North Bangkok is a modern midscale hotel featuring 235 rooms and suites, all-day dining restaurant and facilities for meetings and events. This is the second new hotel opening in Bangkok in the last two months following the launch of Seekers Finders Rama IV, SureStay Collection by Best Western in June.

Oberoi Group has come forward to invest Rs 1,500 crore in various projects in Andhra Pradesh in India. Oberoi has plans for hotels in Visakhapatnam, Tirupati, Gandikota, Picchukalanka, and Horsley Hills along with operating a tourism center in the Paderu region.

Lemon Tree Hotels announced the opening of a 52-room franchised hotel in Ahmedabad, Gujarat, under the brand, Keys Select by Lemon Tree Hotels, Gandhi Ashram. The hotel is strategically located just a short ride from Gujarat’s Sabarmati River and Sardar Vallabhbhai Patel National Memorial. This is the fifth hotel under the company’s umbrella in the state of Gujarat in India.

Yesterday we touched on Indian Hotels Company Limited’s plan to have 300 hotels by 2025. Further to their Ahvaan 2025 strategy, IHCL said it would expand its footprint in relatively untapped destinations such as North East India. Over the last 24 months, IHCL has rapidly expanded with two hotel signings each month. They expect their flagship Taj will have 100 hotels by 2025, up from the current 89. The Vivanta and SeleQtions brands will increase to a portfolio of 75 hotels from the current 64. Ginger will see the number increase to 125 hotels during the period from 89 at present. IHCL is also scaling up its branded homestay portfolio ‘ama Stays & Trails’ to 500 properties by 2025. They currently have only 98 bungalows.

Sarovar Hotels announced the appointment of Ankush Sharma as the new General Manager – Development. His prior assignment was as GM for The Gaurs Sarovar Portico, Greater Noida.

Chalet Hotels Limited announced the appointment of Rashna Kapadi as Associate Vice President – Architecture. Kapadi will operate out of the Corporate Office in Mumbai. She was previously associated with IMK Architects as Design Director and Head Design with Mahindra Hotels & Resorts Pvt. Ltd.

Simon McGrath was brought on to head the soon-to-open Crown Sydney back in February. He was named chief executive of the multi-billion dollar property and group head of hospitality, coming over to Crown after 15 years leading Accor’s Pacific division. McGrath announced he was leaving Crown late last week. Crown was recently purchased by Blackstone Group.