Archive | Hospitality

New Christchurch hotel goes on market

A new hotel under construction in Christchurch, which was to have launched the Ramada Encore brand in New Zealand, has gone on the market through Resort Brokers.

The franchise arrangement Wyndham Hotel Group remains an option.

The 88-room 3.5-star hotel is being developed at the corner of Colombo & Salisbury Sts by local company Lepdon Holdings (2006) Ltd (Ann & Gary Le Pine) in collaboration with Vietnamese builder TLC Modular (Thao Li Construction, Trading & Services Co Ltd).

Resort Brokers Australia national sales manager Trudy Crooks said the Le Pines had intended to operate the hotel themselves, but then decided to sell it

Expressions of interest close on Friday 17 November.

Links:

Resort Brokers NZ
The Hotel Conversation, 23 October 2017: Brand new Christchurch cbd hotel for sale
Wyndham Hotel Group, 1 May 2017: Ramada Encore Brand Debuts in New Zealand
TLC Modular

Attribution: Wyndham, Resort Brokers, The Hotel Conversation, TLC.

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AccorHotels details full takeover of Mantra

Accor SA (AccorHotels) has proposed a full $A1.2 billion takeover of Gold Coast-based hotelier Mantra Group Ltd, and on Thursday the Mantra board said it would recommend acceptance.

Mantra has a portfolio of 125 Peppers, Mantra & BreakFree hotels & resorts in Australia, New Zealand, Indonesia. & Hawaii. 11 are in New Zealand.

Image above: The Peppers Beacon in Queenstown.

Accor has 34 hotels in New Zealand and one more, the So Sofitel Auckland on Customs St, due to open in the first quarter of 2018. They’re under the Sofitel, Pullman, MGallery, Mercure & Grand Mercure, Sebel, Novotel & Ibis brands.

Mantra’s board said it had entered into a binding agreement for Accor to acquire all the shares of Mantra at $A3.961 cash/share (on a fully diluted basis – an A6c/share final dividend has just been paid), including a potential special dividend, by way of a scheme of arrangement.

Customary conditions include approval by the Federal Court of Australia and regulatory approvals, including from Australia’s Foreign Investment Review Board and the Australian Competition & Consumer Commission.

Mantra shareholders will get a scheme booklet in February. The meeting to vote on the proposal is expected to be held in March, enabling the scheme to be implemented by the end of March.

The cash consideration represents an implied market capitalisation of $A1.18 billion and an implied enterprise value of $A1.25 billion for the June 2017 year, on a fully diluted basis.

In addition, Mantra will have the discretion to pay shareholders a special dividend of up to A23.5c/share, which will be deducted from the $A3.96 headline value.

Mantra’s board unanimously recommended the scheme.

The board said the price represented a 22.6% premium over Mantra’s closing price on 6 October, the last trading day before a possible deal was disclosed, 29.2% over the 30-day volume-weighted average, and 33.1% over the 90-day volume-weighted average.

It equated to an underlying 2017 financial year price:earnings multiple of 23.7x and an underlying EV/EBITDAI (enterprise value:earnings before interest, taxes, depreciation, amortisation & impairment) multiple of 12.4x, both of which the board considered attractive.

Mantra chair Peter Bush said it was an attractive outcome for shareholders, recognised the strategic value of the company’s business and its success in becoming a leading accommodation provider: “The offer represents compelling value and provides an attractive opportunity for shareholders to realise this value. AccorHotels has a global capability and deep skills that will benefit Mantra’s customers and provide opportunities for our team members.”

Accor chair & chief executive Sebastien Bazin said: “We have long admired the Mantra business, both in respect of its brands & properties as well as its people & processes. We will be looking to bring together the best of both companies to provide an enhanced experience for our customers & employees in what is an exciting period of growth of the industry in Australia & New Zealand.”

Link: Mantra

Earlier story:
11 October 2017: AccorHotels puts control proposal to Mantra

Attribution: Company releases & websites.

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AccorHotels puts control proposal to Mantra

AccorHotels owner Accor SA has put an $A1.2 billion proposal to take a controlling interest in Gold Coast-based Mantra Group Ltd and is undertaking due diligence.

Mantra has a portfolio of 125 Peppers, Mantra & BreakFree hotels & resorts in Australia, New Zealand, Indonesia. & Hawaii. 11 are in New Zealand.

Mantra confirmed on Monday it had received an indicative & non-binding proposal from Accor in relation to a potential control transaction, to be implemented by way of a Mantra scheme of arrangement, at $A3.96 cash/share (on a fully diluted basis). That net figure is made up of $A4.02/share less the final dividend paid last month, and including a potential special dividend.

Mantra said it had granted Accor access to due diligence to determine if a transaction can be agreed & recommended unanimously by the Mantra board: “The discussions are incomplete and any entry by the parties into binding transaction documents remains subject to a number of conditions, including (without limitation) the approval of both the Mantra & Accor boards and agreement on documentation.

“If any proposal is agreed, the proposal will be subject to regulatory approvals & other conditions to be determined. There is no certainty that an agreement will be reached or that the proposal will be implemented.”

Mantra said it had retained Highbury Partnership as financial advisor and Baker McKenzie as legal advisor.

Mantra was the Stella Hospitality Group in 2008 when CVC Capital Partners bought a 65% stake in it, Stella Travel Services UK & an interest in Jetset Travelworld for $A400 million, as former owner MFS Ltd was collapsing. At the end of 2012, CVC still owned over 50%, UBS had taken 40% through a debt-for-equity swap and management held the balance.

Mantra Group listed on the ASX in June 2014.

Earlier story:
1 February 2013: Mantra adds 2 NZ hotels to network

Attribution: Company release.

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Hotel occupancy & rates up, but more stock on way

An increase in international visitors, strong economic growth & lack of supply have fuelled a surge in hotel occupancy & room rates, according to new CBRE research.

CBRE NZ hotels & leisure director Peter Hamilton said yesterday hotels nationwide achieved an occupancy rate of 80.9% in the June year, and average daily rates were up 11.7% to $182.63.

A key indicator of commercial performance – revenue per available room (revpar) – increased by 12.3%.

The rise in returns came as New Zealand experienced a 10.2% increase in international visitor arrivals, with many staying for longer. The research also indicated a recent influx in Chinese visitors was plateauing, while increased air capacity across the Pacific brought a 26% increase in visitors from the US.

Mr Hamilton said: “It’s clear to see when the trend began, but how sustainable it is another matter. If we look to the data in the first half of the decade post the global financial crisis, we see a general theme in term of a decline in average daily rates for Auckland, Rotorua, Wellington, Christchurch & Queenstown. 2011 seems to be a key year for the market, with the Rugby World Cup & the Christchurch earthquake in their own way helping to trigger a surge in occupancy & rates witnessed in recent years.

“It’s clear, though, that we’re coming to the peak of this recent trend, with some regions there already, with future sustained growth reliant on new stock to keep pace with the demand.”

Big events help Auckland

In Auckland, occupancy has neared 95%, up from 76% 5 years ago, and the average daily rate increased from around $140 after the Rugby World Cup to $200 in June this year.

Mr Hamilton said this had flowed through to increasing revpar, supported by the Lions rugby tour and world masters games, combined with the general economic buoyancy encouraging domestic travel.

“In Auckland in recent years it’s been all about hotels being effectively full on regular occasions, and future occupancy growth potential appears to be limited. With new stock expected in coming years, there is a real possibility for occupancy to plateau or decrease and further average daily rate growth will depend on hoteliers’ ability to hold strong on room rates in the face of increasing competition.”

Rotorua – a market usually dependent on summer traffic – enjoyed occupancy close to 80% in the last 2 years: “Like Auckland, with the occupancy rate reaching capacity during the high season due to a lack of supply, there is likely to be a corresponding impact on revenue in the Rotorua market.

“The recent drop in occupancy may result in a subsequent retraction in growth rates. This could be offset by a new 130-room 5-star Pullman hotel recently announced for Rotorua, which would increase hotel supply by 8.4% but also increase the overall quality of hotel stock in the market.”

Mr Hamilton said Queenstown’s average daily rate was below $150 in June 2012 and had risen to $210 in June this year, supported by night flights into the airport, especially from Australia.

More new stock on horizon

Statistics NZ said on Monday the value of consents for hotels, motels & other short-term accommodation shot up to $490 million in the June 2017 year – $42 million more than in the 3 previous years combined. New hotels in Auckland & Canterbury drove the 216% increase from the June 2016 year.
2 of the new Auckland hotels are the Park Hyatt Auckland, under construction on the former Team NZ site in the Wynyard Quarter, and the hotel which will be built beside SkyCity Entertainment Group Ltd’s NZ International Convention Centre.

5 other hotel projects in Auckland, Wellington & Christchurch had consent values over $10 million, including an office building conversion & a refurbishment.
International visitor numbers have continued to break records – up 11% in the June 2016 year, and up 10% in the last 12 months.

Attribution: CBRE & Statistics NZ releases.

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Accor to run Chows’ Rotorua hotel

NZAX-listed property company Chow Group Ltd’s management company, CGML Ltd, has awarded the management contract for its Rotorua hotel to AccorHotels.

CGML bought the 30-year-old, 10-storey, 8000m² office Zens Centre at 1135 Arawa St in 2015 and is converting it into a 130-room hotel.

Director John Chow (pictured in front of the building with mayor Steve Chadwick) said it would carry a 5-star brand. Work on architectural plans has started and the conversion should start in July. It’s expected to open at the end of 2018 or early 2019.

AccorHotels already operates a Novotel in Rotorua and the ibis Rotorua Lakeside.

Ms Chadwick said the retail & tourism sectors were doing extremely well in Rotorua and its economy was performing above the national average: “Rotorua is growing & thriving. Our population now exceeds 70,000 and continues to grow, and unemployment is dropping. It’s important that we continue to build on these positive achievements, and projects such as the Chow Group’s new upscale hotel are critical to our success, improving our tourism infrastructure and creating work opportunities.”

Attribution: Company release.

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Hotel proposal unveiled for Simunovich site on Viaduct

Viaduct Harbour Holdings Ltd unveiled plans yesterday for a luxury hotel to replace the Simunovich Fisheries building at One Market Square – on the Viaduct Basin and across the water from Fu Wah International Group’s Park Hyatt Hotel rising in the Wynyard Quarter.

Colliers has been appointed to undertake a global search for a development partner. Its international expressions of interest campaign will close on Tuesday 2 May.

The proposed 165-room hotel would have a 12,000m² floor area on 12 floors on a 1288m² footprint, and a rooftop bar.

One Market Square on the Viaduct Basin cbd towers to left & right in the background.

Viaduct Harbour Holdings chief executive Angela Bull said the company would make the preliminary design by Warren & Mahoney available to the successful development partner, and the development partnership model would keep the waterfront site in New Zealand ownership.

Ms Bull said the Market Square site was exceptional, directly facing the harbour on 2 sides and offering stunning views of Auckland.

“Viaduct Harbour is an outstanding lifestyle precinct in Auckland with unrivalled access to the water, quality restaurants, apartments & an international marina. One Market Square is perfectly positioned for a world-class hotel that will add to the vibrancy & attractiveness of the precinct.”

Colliers national hotels director Dean Humphries said the surge in visitor arrivals in recent years had led to a critical shortage of quality hotel accommodation.

“The Government predicts that Auckland will likely need another 4300 new hotel rooms over the next decade to keep up with current demand projections. The timing is right for this unrivalled site to be developed to its optimal use.”

The owners of Viaduct Harbour Holdings Ltd (the families of Mark Wyborn, Trevor Farmer, Alan Gibbs & Ross Green) bought 28ha around Viaduct Harbour from Ports of Auckland Ltd in 1996. The company has retained the land interest and sold leasehold interests.

The hotel would replace the Simunovich Fisheries building fronting Market Square at the turn of the Viaduct Basin towards the Lighter Basin. Across the water, the ASB Centre and the Park Hyatt on Halsey St.

The Park Hyatt

Across the water on Auckland Council leasehold land in the Wynyard Quarter, the joint venture between local company Hawkins Group Ltd (sold by the McConnell family to Downer EDI Ltd of Australia 10 days ago) & China Construction NZ Ltd is 9 months into construction the Park Hyatt, which is scheduled for completion late next year. It will have a total floor area of 29,000m² & 195 rooms.

China Construction (China State Construction Engineering Corp Ltd) is headquartered in Shanghai and listed on the stock exchange there, and Fu Wah is based in Beijing.

Earlier stories:
9 March 2017: McConnells follow up Harker deal with Hawkins sale to Downer
3 July 2016: Hawkins & China Construction in joint venture to build Park Hyatt on Viaduct Basin
9 September 2015: Waterfront Park Hyatt gets consent
21 November 2014: Chinese hotel on Viaduct waterfront to be a Park Hyatt
16 April 2014: Update: Wynyard hotel construction cost closer to $700,000, leasehold factors undisclosed

Attribution: Agency release.

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Airport company & Tainui to build Pullman at terminal

Auckland International Airport Ltd & Tainui Group Holdings Ltd said on Friday they’d agreed to develop a 5-star hotel next to the airport’s international terminal & the existing 4-star Novotel hotel. AccorHotels will operate the new 250-room hotel as the Pullman Auckland Airport.

Auckland Airport property general manager Mark Thomson said the timing was influenced by unprecedented demand for hotel accommodation in Auckland.

The hotel will be developed in a 50:50 partnership between Auckland Airport & Tainui. As part of this agreement, Auckland Airport has increased its ownership stake in the Novotel hotel to 50%. The 4-star-plus 263-room Novotel was completed in 2011.

The new hotel building will carry the name Te Arikinui, the chiefly title the late Maori Queen Te Atairangikaahu chose when she ascended to the wherowhero (throne).

Chris Joblin, Chief Executive of Tainui Group Holdings, says that this agreement reflects the strength of the relationship that has been established between Tainui Group Holdings and Auckland Airport.

Construction is expected to start by the end of this year, and the hotel is scheduled to open by late 2019. By then, the airport’s international terminal will have been expanded and work should be underway on the domestic section of the combined domestic & international terminal.

Image above: Artist’s impression of the new Pullman hotel next to the existing Novotel.

Earlier story:
24 July 2009: Novotel to stand in airport carpark

Attribution: Company release.

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Oaks to introduce Avani brand at Metropolis

Oaks Hotels & Resorts NZ Ltd, a subsidiary of Bangkok-based Minor International PCL, intends to introduce the Avani brand to New Zealand after gaining Overseas Investment Office approval to buy Chang Eun Oh’s hotel business at the Metropolis apartments in Auckland.

The complex has 412 apartments & commercial units, not all in the hotel pool.

The Overseas Investment Office made its decision on 7 November and released it yesterday, but neither Oaks nor Minor International (known as MINT) has made any statement on this acquisition. The consideration wasn’t disclosed.

Ms Oh’s business, through Metropolis Hotel Apartments NZ Ltd, Metropolis Serviced Apartments Ltd & Metro Suites Ltd, was far smaller than the original hotel management contract to Ascott Group, a subsidiary of CapitaLand Ltd of Singapore.

Ascott ran the hotel from the building’s opening in 1999 until the body corporate terminated its contract in 2008. The body corporate installed Millennium Hotels & Resorts on a 3-month contract, which Millennium didn’t renew.

The Minor group’s hotel business started in 1978 as Royal Garden Resorts when it acquired a hotel on the Pattaya beachfront which had 30 bungalows & 27 rooms, since expanded to 295 rooms. The group has grown its portfolio to 155 hotels in 32 countries, 1900 restaurants & 300 retail trading outlets. Its mixed-use business operates spas, shopping plazas & entertainment outlets, residential properties and a points-based vacation club. The parent company is listed on the Thailand Stock Exchange. In its last accounts, for 2015, It had net equity of $NZ1.55 billion and total assets of $NZ4.2 billion.

Minor bought the Oaks hotel chain in Australia in 2011, including its New Zealand interests – 3 hotel operations in apartment buildings in Auckland and 2 in Queenstown.

Links:
Oaks Hotels & Resorts
Minor Hotels
Minor International

Earlier stories:
23 March 2011: Bangkok hotelier Minor to bid for whole of Oaks
18 March 2011: Oaks founder sacked as receivers put his shares up for sale
22 May 2008: Ascott’s Metropolis contract terminated, Millennium takes over short-term

Attribution: Overseas Investment Office, Companies Register, Oaks, Minor.

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Russell to convert 396 Queen St to hotel

The Russell Property Group Ltd (Brett Russell) & associated investors have bought the Amex-blue office tower on the corner of Queen St & Mayoral Drive to convert it into a 250-room, internationally branded hotel.

The 19-level tower at 396 Queen St was completed in the 1987 property downturn and has never been fully let. The one part of the building that did continue operating was the restored Queen’s Head Tavern.

Mr Russell said: “The resource consent has been issued for the change of use to a hotel after a highly positive process with Auckland Council. Works are planned to start in December, with completion ready for the 2017-18 summer season.” He said his company was in advanced negotiations with one of the largest global hotel companies to manage the investment.

Russell company Dominion Constructors Ltd, which repaved Queen St’s footpaths a decade ago, will carry out the Queen St conversion. The company has completed a growing number of hotel projects, ranging from refurbishment & conversion through to new-builds – Breakfree on Cashel in Christchurch, Adina Hotel Auckland, Quest Highbrook, Sudima Auckland Airport & Sofitel Wellington.

The Russell Property Group managed the conversion of the former Quba Apartments, near Vector Arena, to the 4-star plus Adina Apartment Hotel. The hotel opened a year ago, providing a combination of studio & one-bedroom units, and 2-bedroom executive apartments have been added recently.

Colliers national hotels director Dean Humphries, who negotiated the Queen St sale, said Auckland was desperate for more hotels as the tourism boom took the city to capacity: “The massive increase in international tourists over the last 3 years – a 26% increase, or nearly 700,000 additional visitors/year – has led to a critical shortage of hotel rooms in Auckland and other key tourism destinations around New Zealand.”

A report for NZ Trade & Enterprise in May said the shortfall in Auckland, Rotorua, Wellington, Christchurch & Queenstown would reach 4500 rooms by 2025.

“With market occupancy now at 86% and average room rates growing at over 10%/year, Auckland now ranks amongst the best performing ‘gateway cities’ in the world,” Mr Humphries said.

Trade & Enterprise investment general manager Quentin Quin said hotels of 4 stars & above were the type of project the Government had been targeting through the hotel investment attraction initiative.

Link:
NZ Trade & Enterprises, 24 May 2016: Market research shows a compelling case for investment in new hotels

Attribution: Agency release.

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Hainan conglomerate adds Hilton stake to its international expansion

The HNA Group, based on Hainan Island off the south coast of China, expanded its hospitality arm internationally this week with an agreement to buy 25% of Hilton Worldwide Holdings Inc from asset manager the Blackstone Group LP for $US6.5 billion.

It will also hold 25% of Park Hotels & Resorts and Hilton Grand Vacations, due to be spun off from Hilton Worldwide at the end of this year.

HNA has already expanded this year through its acquisition of another US operator, Carlson Hotels Inc, still to be settled.

Blackstone’s interest in Hilton will fall to 21% when this new transaction closes in the first quarter of 2017.

HNA gets 2 directors – one representing HNA & one independent – on a board increased from 8 to 10. It will have a restriction on selling any of its interest for 2 years and limits on increasing its interest without Hilton’s consent. Blackstone will retain 2 board seats, including the chair.

HNA’s purchase price, $US26.25/share, represented a 14.6% premium over Hilton’s closing price the previous Friday.

Hilton Hotels Corp bought back Hilton International in 2006 after a 40-year separation, then merged with a Blackstone affiliate in 2007, valuing it at $US26.7 billion including debt. The merged entity became Hilton Worldwide in 2009 and, in 2013, it was relisted on the New York Stock Exchange.

Hilton has a portfolio of 775,000 rooms in 4700 managed, franchised, owned & leased hotels & timeshare properties in 104 countries & territories, run under 13 brands.

The Blackstone Group LP has $US361 billion of assets under management.

HNA Group was founded on the business of Hainan Airlines Ltd in 1993 and has grown into an international conglomerate with $US90 billion of assets. Its interests include 1250 planes flying under numerous banners, HNA Capital (leasing, banking, insurance), HNA Tourism (Caissa Touristic, China’s top outbound tour operator, which runs over 240 travel agencies), HNA Hospitality Group (a range of nearly 2000 hotels in all tiers), HNA Airport Group (13 airports under management & co-operation projects, plus airport economic & industrial parks, all in China), HNA Real Estate (developing the 10,000 mu (667ha) Hainan Island cbd and the 49,000 mu (3267ha) South Sea Pearl River manmade island), HNA Retail (over 1.2 million m² of outlets) & HNA Logistics (about 60 ships, a shipbuilder, cold-chain logistics).

In April, HNA agreed to buy another US-based hotelier with international interests, Carlson Hotels Inc, including its 51.3% of Stockholm-listed Rezidor Hotel Group AB (publ), which is Carlson’s master licensee based in Brussels and has 474 hotels in Europe, the Middle East & Africa. HNA also owns 30% of NH Hotel Group SA, based in Madrid, which has 400 hotels.

The Carlson transaction was scheduled to settle in the second half of this year. When that happens, under Swedish takeover rules HNA will have 4 weeks to either launch a full public tender offer for the whole of Rezidor or sell down below 30%.

Links:
Hilton Worldwide
Blackstone
HNA Group
Rezidor

Attribution: Company releases.

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