More Hotels than Adding
|September 2002 - Regent International Hotels, established in Asia but
now US-based, is once again losing more hotels than it is adding - despite
a push in Europe.
Its disastrous loss of two prestige resorts in Las Vegas was accompanied by loss of its flagship Regent in Hong Kong, now an Inter-Continental.
This year the 54-room Schlosshotel in Berlin was reflagged a Regent. But the hotel is managed by Dorint Hotels, and with few details revealed, this appears to be little more than a reservations agreement.
Regent is losing credibility as it struggles under Carlson Hospitality to add hotels. The Dorint agreement indicates that the company may be paying less attention to quality and more to quantity, which could in turn lead to further problems in the future.
Hotels under development are Boston and two secondary locations in Europe (Malta, and the French Riviera). All are now due in 2004, but all are late - Boston was due 2003, Malta 2002, and France 2003.
Since buying the brand from Four Seasons in 1997, Carlson has added one hotel – Berlin - although three contracted earlier have also opened. Regent has the same number of hotels as in 1995 - 12.
However, Four Seasons also failed to develop the Regent brand - which it bought in 1992. Like Carlson now, Four Seasons lost more Regent hotels than it added, but partly because it rebranded some Regent projects as Four Seasons.
These extraordinarily-poor corporate results must raise the possibility
that the Regent brand will be sold again. Making this more likely is the
fact that not all news from other Carlson hotel brands is good. Best seems
to be its first and core brand, Radisson Hotels.
Asia Pacific hotels in Q1
Post 911, hoteliers in Asia Pacific are scanning regional results more carefully – looking for clear market indicators. But as usual, the message can be mixed.
In terms of traffic through hotels (occupancy) results were reasonable. There were increases in China (the three cities shown here – Beijing, Hong Kong, and Shanghai) and Vietnam’s business capital, Ho Chi Minh City. In most of the rest, the decline was under 5%.
But Bali was bad, as was the country’s capital, Jakarta. This is probably a 911 factor (and not Indonesia’s own violence problems, which have subsided). However, the decline was with traffic from Japan, an important market source for Bali; total outbound travel from Japan in Q1 was down 16%.
Something of a surprise was the sizeable decline in Singapore. The country’s arrivals were down only 4% in Q1. This would tend to indicate the decline is from traffic not included in those main counts - which is Malaysian nationals arriving in Singapore by land.
There were a number of sizeable changes in average rates. But a big share of this would be related to exchange rates. As local currencies increase in value against the US dollar, the US dollar average rate increases.
That would explain the high growths in average rate in Bali, Bangkok, and Ho Chi Minh City.
But there were also surprises. Zero growth in Beijing (although January and February are the slowest months for hotels, foreign visitors into the country increased 17% over that same period). Does this mean there was a decline in domestic arrivals into hotels? The domestic sector has become a significant market even for major hotels, averaging around 10% and up to 20% in some international hotels.
The other surprise was the decline in Hong Kong, even though total arrivals increased 12% in Q1 and the exchange rate is fixed against the US$. One factor would be the increased share of mainland China traffic into Hong Kong. Some of this traffic is at lower rates than other markets, but there are other factors also – a higher share of contracted rates, and a higher double-occupancy share.
A destination in trouble is Manila – linked more closely with 911, and counting a sizeable Japan market share. Q1 arrivals fell almost 4%. However, its currency has declined against the US dollar, so that would push US$ rates down slightly.
With revpar being the results of these two other measures, there were also some sizeable changes. Overall, rates increased in seven of the 15 destinations covered here, leaving a slight majority in decline. That is probably considered not a bad result.
Hotel measures in Asia Pacific
*At average exchange rate for end-of-months.
Source: Travel Business Analyst.
TRAVEL BUSINESS ANALYST
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|Also See||Seoul and Tokyo Hoteliers Score During World Cup / Aug 2002|
|Starwood's Asia Pacific President, Miguel Ko - Exclusive Interview with Hotel Asia Pacific / April 2002|