BUDGET HOTEL CRAZE ibis Singapore Transaction

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Posted: 24 Jun 2010 | 6:00 am

First we had the Asian low cost airline carriers like AirAsia, Tiger, and Jetstar flood into the market place and now comes the budget hotels with ACCOR's Ibis, IHG's Holiday Inn Express and Tunehotels.com.

Back of substantially lower investment costs, operating efficiency and a growing segment of regional business the ibis Bencoolen was a slam dunk for US institutional giant LaSalle Investment Management (LIM).

As part of the fund strategy to gear up project and then exit the Singapore property which has been a huge hit with travelers has now been put on the transaction market and expectations are that the 538 key hotel will capture a significant upside on sale.

Here in Phuket many industry players remember LaSalle's banner conversion of the Karon Villa Resort into a Crowne Plaza and subsequent sale for in excess of USD 100 million a few years back to Kingdom Hotel Investments. The property was subsequently rebranded as a Moevenpick back of the new owner's stake in the chain.

ACCOR's ibis has two properties on the island in Patong and Kata which are owned by the substantial Thai hotel group Erawan.

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Villa Lloret, 02 Jul 2010 | 6:09 pm

Bill, a pity both LaSalle and many other investors don't take further and profitable action on this same opportunity by developing even more, than such a few isolated projects, for the needed budget/economy inventory already lacking and required in various parts of Asia. Recent updates on the actual, current and revised development pipeline to the end of May 2010 by Lodging Econometrics, shown at the recent 2nd International Hotel Investment Forum - Asia Pacific in Macau a fortnight ago, show that less than 50% of the already needed total new mid-range inventory (as already assessed by all demand generators and publicised by the likes of Horwath, HVS and other consultants, including JLL Hotels over the last 48 months)is actually in development at this time. That is particularly true in India and China where it is most needed, leaving many fortunes perhaps left unmade. Lenders need to be more aware and open ot the fact that some 'green field' developments in these categories are among the better bets, if they could just get their heads around the details of the markets still ill-served rather than worry about why the 5 stars they might have lent to aren't filling up at high rates either!

Kevin Murphy, 28 Jun 2010 | 2:23 pm