Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Hotels & Hospitality Group | May 2017 Hotel Destinations Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Tourism Auckland Supply Demand Outlook Auckland International Airport, which is the ‘gateway’ for Auckland and New Zealand overseas visitors, has experienced strong growth. For the period YTD December 2016, total passenger movements have increased 12% with an increase recorded in domestic passenger movements, up 12.5% and international passengers increasing by 11.5%. International visitor arrivals to New Zealand reached 3.5 million for the period year ending February 2017, a 10.7% improvement over the corresponding prior year period.

Seven projects (comprising a total of 1,291 rooms) are currently under construction and are forecast to enter the market over the next two years, with five of the hotel projects (818 rooms) comprising 5-star product. The seven new hotel projects represent an approximate 20% increase in room supply, which is an unprecedented level of stock. However, as the room supply is expected to enter the market in a staggered manner (over a two to three-year period), this should alleviate some concerns of an oversupply shock.

Note: Auckland Hotels refer to Marketwide Source: Tourism Industry Association, Statistics New Zealand, JLL ADR – Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Auckland reported an average occupancy level of 86.6% for the period year ending March 2017, the highest occupancy level on record in over 20 years.

Auckland’s market occupancy has risen every year since 2010, after reaching a post-GFC low of 69.5% in 2009. FIT and Corporate business dominate the business mix of Auckland hotels contributing 47.5% and 20.5% of hotel guest nights respectively, y-o-y to March 2017. International sourced guests accounted for 45% of guest nights sold, while domestic guests accounted for 55%.

We anticipate that Auckland’s accommodation market will continue to perform strongly in the short term and is poised for further rate growth and to solidify recent gains in occupancy levels given the current capacity constraints, although ultimately the ‘wave’ of new supply is likely to ease capacity constraints in the medium term (between 2018 – 2019). Beyond the short term some caution is warranted as the market begins to absorb the forecast significant levels of room supply, which ultimately is expected to soften the current historic high occupancies (above 80%) with levels likely to revert in the medium to longer term to the mid-70% range.

Quick Facts International Visitor Arrivals (NZ 2016) Number of New Rooms (2017) OCC ADR RevPAR 3.5 million 663 rooms 86.6% NZD 191 NZD 166 Jet Inn Extension, Auckland International Airport 60 rooms Swiss-Belsuites Victoria Park 40 rooms New notable hotels Ibis Christchurch Novotel Christchurch Notable hotel deals SKYCITY Hobson Street Hotel Four Points by Sheraton Park Hyatt Auckland M Social Auckland (former Copthorne Hotel Auckland Harbourcity) The Sebel Auckland Manukau Upcoming hotels 1 Hotel Destinations – Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Bali Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) OCC ADR RevPAR 4.9 million 3,892 rooms 66.4% USD 146 USD 97 Mövenpick Resort & Spa Jimbaran Wyndham Resort Tamansari Jivva Sthala Ubud Bali Sol House Legian New notable hotels There were no hotel transactions in H2 2016 Notable hotel deals Kempinski Nusa Dua Fairfield by Marriott Bali Legian The Westin Ubud Resort & Spa Six Senses Bali Upcoming hotels Tourism Supply Demand Outlook Total visitor arrivals were 4.9 million in 2016, representing an increase of 22.5% compared to 2015. As of YTD March 2017, international visitor arrivals continued an upward trend, increasing 22% y-o-y to reach 1.3 million visitors.

For the full year 2017, the Bali Provincial Tourism Agency is targeting approximately 40% of the targeted 15 million foreign tourist arrivals to Indonesia in 2017, which is approximately six million foreign tourists. Strong growth in arrivals can be attributed to the extension of the visa waiver programme in 2015, as well as the improvement in air connectivity to key source markets such as Greater China and Australia.

Approximately 1,737 rooms opened in 2016, representing a 9.8% y-o-y increment. Recent major openings in 2016 include the 136-room Sol House Legian, the 222- room Wyndham Resort Tamansari Jivva, the 143-room Sthala Ubud Bali and 297- room Mövenpick Resort & Spa Jimbaran. In 2017, approximately 3,892 rooms are in the pipeline. Majority of the new supply in clustered in the luxury sector (44.3%) followed by the upscale sector (34.2%). In terms of location, most will be concentrated in the Nusa Dua and Uluwatu areas. However, it is not unusual for several projects to be postponed or cancelled due to financing difficulties.

Note: Bali Hotels refers to Upscale Source: STR Global (YTD March 2017), Bali Government Tourism Office, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy As of YTD March 2017, Mainland China was Bali’s largest source marketing, contributing 29.6% of total visitor arrivals. This is followed by Australia contributing 19.8% of total visitor arrivals. Mainland China saw the largest y-o-y increase of 58.6%, underscoring the burgeoning Chinese travel demand in Asia. Despite travel advisories, most key source markets recorded strong growth in YTD March 2017, suggesting that foreign tourists are largely unfazed and are increasingly drawn to Bali as premier tourism destination.

Looking forward, visitor arrivals from key source markets are expected to continue rising. Recent improvements in air connectivity from Ngurah Rai International Airport with new flight routes, ongoing improvements in airport accessibility, and the extension of visa waiver programme should fuel the continued spike in foreign tourism demand in Bali. Moreover, the recent corporation between Indonesia and Chinese tourism authorities should provide an added boost to Indonesia’s overall tourism sector. 2 Hotel Destinations – Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Tourism Bangkok Supply Demand Outlook Bangkok received 20.8 million international visitors in 2016, representing an increase of 7.5% y-o-y, as Bangkok continues to be a top global destination after its resurgence in 2015 from the prior year’s 2014 political unrest.

The passing of His Majesty King Bhumibol Adulyadej resulted in a minor dip in arrivals which recovered quickly as businesses return to usual. Record arrivals are expected in 2017 as early-year airport statistics are already indicating growth. Since the beginning of 2017, approximately 800 rooms have been added to the Bangkok market with another 2,100 rooms estimated to enter the market by year-end. Over 35% of future supply over the next four years is concentrated in the upscale segment. Key new projects include ibis Styles Bangkok Sukhumvit 50, Grande Centre Point Sukhumvit 55, and ibis Bangkok IMPACT on Chaengwattana Road.

Note: Bangkok Hotels refers to Upscale Source: STR Global (YTD March 2017), Tourism Authority of Thailand, Ministry of Tourism and Sports Thailand, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Mainland China remains the biggest source market to Bangkok, followed by Japan, India and South Korea. Bangkok has seen a slowdown in growth in visitor arrivals from Mainland China to 5.9% growth y-o-y in 2016 from 82.5% growth y-o-y in 2015. This comes as the government launched a crackdown on zero-dollar tours in September, leading a q-o-q drop in Chinese arrivals.

Key markets which experienced strong growth include USA (12.7%), Middle Eastern countries (11.1%) and India (8.2%). Bangkok will continue to see strong growth in visitor arrivals with ongoing airport expansions to increase capacity from 45 million to 60 million for Suvarnabhumi Airport, and from 28 million to 40 million for Don Mueang Airport. Higher airport capacities are expected to translate to lodging demand and absorb the oncoming room supply.

Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) OCC ADR RevPAR 20.8 million 2,876 rooms 86.4% THB 3,453 THB 2,983 Ibis Bangkok IMPACT 587 rooms Grande Centre Point Sukhumvit 55 442 rooms ibis Styles Bangkok Sukhumvit 50 171 rooms New notable hotels Swissotel Nai Lert Park Notable hotel deals The Bangkok EDITION by Ritz Carlton Park Hyatt Bangkok Lancaster Bangkok Upcoming hotels 3 Hotel Destinations – Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Beijing Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) ADR RevPAR 4.2 million 1,479 rooms 66.1% RMB 559 RMB 389 Grand Metropark Hotel Beijing 427 rooms Grand Metropark Longxi Conference Center 346 rooms InterContinental Beijing Sanlitun 300 rooms Tylfull Hotel 226 rooms Chao Clubhouse 180 rooms New notable hotels Somerset ZhongGuanCun Beijing Notable hotel deals Beijing Bvlgari Hotel Mandarin Oriental Beijing Hualuxe Beijing Xinan Hotel The Puxuan Hotel and Spa Muji Hotel Beijing Upcoming hotels Tourism Supply Demand Outlook Data from Beijing’s Tourism Bureau show the city’s international arrivals dropped 0.8% y-o-y to 4.2 million at the end of 2016.

Visitors from South Korea and Japan decreased 8.8% and 4.0% respectively, due to their slower economy and economic environment. French and German travelers have also trended downwards by 12.3% and 2.9% respectively. The recent fall in the euro has led to a decline on business activities with Beijing’s long haul trading partners.

Just five new hotels opened in Beijing in 2016, adding 1,479 rooms to the market. High-profile openings included Intercontinental Beijing Sanlitun and Chao Clubhouse, both of which are located in Sanlitun. Strict development restrictions within the city centre are expected to continue to restrain future supply. Compared with Shanghai, where round 26 new hotels are expected to enter the market in 2017, just nine new hotels (2,204 rooms) are planned for Beijing. Note: Beijing refers to Four Star hotels Source: STR Global (YTD March 2017), Beijing’s Tourism Bureau, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Beijing’s hotel demand is driven by business travel as well as the tourism and MICE (Meetings, Incentives, Conferences and Exhibitions) travel segments.

Corporate demand remains the major demand driver. As Beijing is the political and commercial centre in Mainland China, a large number of corporates have set up their headquarters in Beijing, generating considerable business demand.

The Beijing market will benefit from enhanced intercity transportation and tourism infrastructure development underway. Ahead of the opening of Universal Studios in 2020 and the 2022 Winter Olympics in Beijing and Zhangjiakou, several infrastructure upgrades in and around the city will support the hotel sector, including two new highways linking Beijing to nearby tourism destinations, such as Chongli, Yanqing, and Qinhuangdao. OCC 4 Hotel Destinations – Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Tourism Brisbane Supply Demand Outlook In 2016, a total of 23.1 million visitor nights were spent in Brisbane City.

International visitor nights accounted for 67.9% and domestic nights accounted for 32.1%. Domestic visitor nights in Brisbane increased by 5.3% y-o-y however international visitor nights in Brisbane decreased moderately by 1.6%. New supply over the second half of 2016 in the Brisbane City market increased by approximately 217 rooms or an increase of approximately 2% on the existing stock. So far in 2017, two hotels have opened being the Sage Hotel James Street and the Holiday Inn Express Brisbane Central. Looking forward we are aware of a further six short term accommodation development current under construction and due for completion between 2017 and 2019.

If all projects materialise, this will represent an increase of 1,376 rooms or 12% on the existing stock. Note: Hotel supply within the Brisbane City Region Source: STR Global (YTD March 2017), Tourism Research Australia (2016), JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Mainland China remains the biggest source market to Brisbane, followed by Korea, Taiwan and the United Kingdom. In 2016, Chinese visitor nights in Brisbane City grew 14.7% year-on-year and has grown at an average annual rate of 25.2% over the last 10 years. While leisure related demand remains the primary purpose of visit, the employment segment increased significantly during 2016 in Brisbane City.

In the short to medium term, conditions are likely to remain stagnant as further supply enters the market. Any notable uplift in performance will also be dependent on the extent of recovery in the corporate and conference segment as well as growth in the leisure segment. Resource sector demand may improve over the medium term with renewed investment in mining infrastructure projects, however a timeframe on these potential trends remains unclear.

Holiday Inn Express Hotel 226 rooms Swiss Belhotel Brisbane 134 rooms Sage Hotel James Street 93 rooms Art Series Hotel - The Johnson 83 rooms New notable hotels Jephson Hotel Notable hotel deals W Hotel Brisbane Southpoint Emporium Hotel Adina on George Street Westin Hotel Brisbane Upcoming hotels Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) OCC ADR RevPAR 935,000 207 rooms 71.5% AUD 152 AUD 109 5 Hotel Destinations – Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Delhi Quick Facts International Passenger Traffic (India 2016) Number of New Rooms (2017) ADR RevPAR 8.9 million 540 rooms 83.1% INR 5,660 INR 4,702 Andaz Delhi 401 rooms Muse Sarovar Portico 73 rooms New notable hotels Aloft New Delhi Aerocity Holiday Inn Express & Suites Delhi Upcoming hotels There were no hotel Transactions in H2 2016 Notable hotel deals Tourism Supply Demand Outlook Delhi has shown growth of 10.1% in international passenger arrivals YTD February 2017 from approximately 2.5 million to 2.8 million.

Foreign arrivals have recorded noticeable rises after the e-visa facility was introduced, now available to over 150 countries, boosting leisure demand from foreign visitors. The new visa improvements are relevant to leisure tourism including visiting friends and family, short duration medical treatment and business visits.

Andaz Delhi and the Roseate House in the Aerocity hospitality district have been the most notable hotel openings recently. Future supply in Delhi remains fairly limited due to scarcity of land and high land prices in the city and new supply will be largely concentrated to the Aerocity hospitality district. The Aerocity has been a key hospitality district as its strategic positioning has enabled Aerocity to absorb commercial, transit arrival and MICE demand from both the Delhi and Gurgaon micro-markets. The Oberoi New Delhi will be closed effective from April 1, 2016, for major renovation and will reopen April 1 in 2018.

Note: Delhi Hotels refers to Delhi Deluxe Source: STR Global (YTD March 2017), Airports Authority of India, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy In 2016, Delhi witnessed continued growth in demand– largely driven by growing MICE and corporate demand, in addition to improved spending capacity and the increased presence of low-cost air carriers. The newly developed Delhi Aerocity hospitality district with over 3,200 hotel rooms, extensive banqueting space and the presence of significant Grade A office space, has seen promising demand levels. The Delhi hospitality market has remained resilient, despite the largest supply increase that the city has seen in the recent past - in the form of the Aerocity hospitality district.

While ADR levels have seen some softening due to a large volume of supply in the Midscale to Upper Upscale segments, demand levels have remained strong. With hotel supply slowing and growing demand, Delhi continues to present investors with a strategic entry into the gateway of the country.

OCC 6 Hotel Destinations – Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Tourism Hanoi Supply Demand Outlook In 2016, Hanoi saw four million international visitor arrivals, up an impressive 21.2% y-o-y, and exceeding Vietnam National Administration of Tourism’s (VNAT) initial expectations of 3.8 million. This represents a five-year Combined Annual Growth Rate (CAGR) of 16.1% from 2011 to 2016. As of March 2017, the city has seen six million visitors, a 7% y-o-y growth, of which over one million are international visitors. In 2016, just over 200 new rooms were added to the Hanoi hotel market in addition to rebranded supply, however 2017 expects to see a much larger addition with over 800 branded hotel rooms to enter the market by year-end.

A further 2,000 rooms will be launched by 2020. Between 2017 and 2020, almost 60% of new room supply or 1,700 rooms will be in the luxury segment. Note: Hanoi hotels refers to Marketwide Source: STR Global (YTD March 2017), Vietnam National Administration of Tourism, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Top source markets to Vietnam include Mainland China, South Korea, Japan and the USA. While continuing its promotional efforts in Japan, Hanoi also aims to expand its market in Russia and France through cooperation with international agencies and diplomatic representatives.

In its tourism drive, Hanoi will position itself as a cultural destination for its food culture and wellpreserved relic sites.

The VNAT continues to strongly market Hanoi as a cultural destination through an advertising campaign with CNN across its international network. The campaign will run on both CNN’s on air and online media from 2017 to 2018. In addition to ongoing initiatives within Hanoi, to further enhance its tourism offerings, Hanoi looks to link its tourism coordination with other northern localities to lengthen international length of stay. With VNAT’s initiatives expected to drive the increase in visitor arrivals the outlook for the market remains positive. Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) OCC ADR RevPAR 4.0 million 843 rooms 85.2% USD 113 USD 96 Novotel Suites Hanoi 151 rooms New notable hotels There were no hotel transactions in H2 2016 Notable hotel deals Novotel Ciputra Hanoi Novotel Hanoi Thai Ha Somerset West Point Hanoi Upcoming hotels 7 Hotel Destinations – Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Ho Chi Minh City Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) ADR RevPAR 5.2 million 1,007 rooms 75.7% USD 117 USD 89 Ibis Saigon Airport 282 rooms New notable hotels There were no hotel Transactions in H2 2016 Notable hotel deals Ascott Waterfront Saigon Ritz-Carlton Saigon Starcity Airport Hotel Upcoming hotels Tourism Supply Demand Outlook International arrivals to Ho Chi Minh City reached 5.2 million in 2016, a 10.6% growth y-o-y exceeding the government’s initial expectations of an 8.5% increase. Between 2011 and 2016, the city registered a Compound Annual Growth Rate (CAGR) of 10.9%.

The growth comes as the city stepped up its efforts to enhance arrivals and average spending with more festivals with a focus on culture and eco-tourism as well as attending travel marts and roadshow overseas.

2016 saw 703 new rooms added to the market. As the city gains traction as an international tourist destination, over 3,500 rooms are expected to be added to the market by 2020, with 1,000 keys expected in 2017. While much of the existing international and locally branded hotels are in the Upscale (35.4%) and Midscale (27.8%) segments, upcoming additions (2017-2020) are concentrated in the Luxury (48.4%) and Upscale (42.4%) segments. Notable openings in 2016 include ibis Saigon Airport in Tan Binh District and Bay Hotel Ho Chi Minh in District 1.

Note: Ho Chi Minh City Hotels refers to Marketwide Source: STR Global (YTD March 2017), Vietnam National Administration of Tourism, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Key source markets to Vietnam include Mainland China, South Korea, Japan and the USA.

While continuing its promotional efforts in Japan, Ho Chi Minh City also aims to expand new markets, targeting Russia and India as future growth markets as the city looks to grow international arrivals to near six million in 2017. The domestic market relies on the city as a key economic and recreational hub with 21.8 million visitors in 2016, and 24 million targeted for this 2017.

Named by Conde Nast Traveler as among the 50 most beautiful cities in the world, Ho Chi Minh City is fast becoming an international tourist destination as the government continues to focus efforts on marketing as well as improving tourist attractions and safety. With ongoing upgrading of museums and approval for a safari and Saigon Cultural and Tourism Village, the People’s Committee is developing a tourism development strategy through to 2030 and beyond to ensure sustainable tourism development. OCC 8 Hotel Destinations – Asia Pacific

Hotel Destinations Asia Pacific - Hotels & Hospitality Group May 2017

Tourism Hong Kong Supply Demand Outlook Total visitor arrivals declined 4.5% in 2016 compared to 2015 mainly due to the sharp decline of same-day visitors from Mainland China.

In April 2015, the Mainland restricted Shenzhen permanent residents to just one entry per week, which has largely contributed to the same-day visitor decline of 8.7% y-o-y. On the other hand, the rate of decline in total overnight visitor arrivals has slowed from being down 5.2% in 2015 to 0.5% in 2016, showing signs that we are beginning to see improvement in Mainland arrivals.

Approximately 888 rooms have been added into the market last year, most of which are small to medium sized midscale/ economy properties in Hong Kong Island and Kowloon. So far in 2017, two hotels have opened, Attitude on Granville with 81 rooms, and the Silka Tsuen Wan with 409 rooms. Approximately 6,000 rooms remain in the pipeline. Notable openings are: Disney’s Explorer’s Lodge with 750 rooms, Rosewood Hong Kong in Tsim Sha Tsui with 600 rooms, the Kerry Hotel by Shangri-La with 545 rooms, and The Murray, a Niccolo Hotel with 336 rooms.

Note: Hong Kong refers to Upscale hotels Source: STR Global (YTD March 2017), Hong Kong Tourism Bureau, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Mainland China is Hong Kong’s largest source market, contributing 75.5% of all total visitor arrivals in 2016.

Over the same period, the number of overall visitors from Mainland China continued to fall, down by 6.7% y-o-y to 42.8 million arrivals. This can be attributed to the socio-political tension, stronger local currency, tightened visa policy for Shenzhen visitors, and increasing competition from other destinations such as Japan and South Korea, which drew significantly more visitors from the Mainland.

The increase in supply and economic uncertainties are expected to limit growth in hotel performance. 2016 has set the stage for a relatively uncertain 2017, with ‘Brexit’ expected to limit European visitors. As a major corporate hub, Hong Kong is always affected by global economic concerns and this remains still in recovery. However, we are cautiously optimistic that hotel performance is likely to return to stabilised levels over the medium term, as Hong Kong has proven itself to be a resilient city on the back of its multi-faceted appeal for FIT, leisure, corporate as well as MICErelated demand.

It is however increasingly competing with cheaper Shanghai for the latter.

Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) ADR RevPAR 56.7 million 1,022 rooms 83.7% HKD 1,755 HKD 1,469 Silka Tsuen Wan 409 rooms Attitude on Granville 81 rooms New notable hotels Newton Place Hotel Kwun Tong Rosedale Causeway Bay J Plus Hong Kong Notable hotel deals Kerry Hotel by Shangri-La Disney’s Explorer’s Lodge Rosewood Hong Kong The Murray, a Niccolo Hotel Upcoming hotels OCC 9 Hotel Destinations – Asia Pacific

Jakarta Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) ADR RevPAR 2.4 million 3,193 rooms 53.8% USD 166 USD 89 Westin Jakarta 272 rooms Mercure Jakarta Cikini 207 rooms Four Points by Sheraton Jakarta Thamrin 164 rooms Four Seasons Hotel Jakarta 125 rooms New notable hotels There were no hotel transactions in H2 2016 Notable hotel deals Swiss-Belhotel Resuna Epicentrum Holiday Inn Simutupang Swiss-Belhotel Kelapa Gading InterContinental Pondok Indah Upcoming hotels Tourism Supply Demand Outlook As of YTD February 2017, international visitor arrivals rose by 17.5% y-o-y to reach 373,219 visitors.

Strong y-o-y growth from 2016 underpinned the recovery in tourism confidence following the bombing attacks in the Indonesian capital in January 2016, particularly amongst foreign tourists. Continued benefits arising from the extension of the visa waiver programme to an additional 45 countries in 2015 also contributed to overall visitor growth. Approximately 1,334 rooms opened in 2016, representing y-o-y increment of 2.3%. Majority of the hotel openings were in the Central region. Major openings in 2016 include the 125-room Four Seasons Hotel Jakarta, the 272-room Westin Jakarta, the 207-room Mercure Jakarta Cikini and the 125-rooms Four Points by Sheraton Jakarta Thamrin.

In 2017, approximately 3,193 rooms are in the pipeline. Notable openings in 2017 include the 312-room Swiss-Belhotel Kelapa Gading, the 323-room Swiss-Belhotel Resuna Epicentrum, the 316-room Holiday Inn Express Simatupang and the 300-room InterContinental Pondok Indah. Note: Jakarta Hotels refers to Upscale Source: STR Global (YTD March 2017), Singapore Tourism Board, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Despite the recent terror attacks in Jakarta in January 2016, overall tourism demand continued its upward trend, underpinned by strong corporate demand.

This is attributed to the fact that Jakarta remains a key business gateway into Indonesia, which holds huge economic potential. This should continue to attract international and domestic corporate demand into the city. However, ongoing global uncertainty, coupled with terrorism concerns, should continue to weigh on tourists’ minds. Continued tourism promotion efforts by the Ministry of Tourism through its “Wonderful Indonesia” campaign is expected to improve visitation into Indonesia. With tourism identified as a key economic driver, coupled with ongoing infrastructure projects, the tourism sector should expect to get an added boost.

Approximately 9,786 rooms are in the pipeline from 2017-2020 in Jakarta.

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Tourism Kuala Lumpur Supply Demand Outlook Total international visitor arrivals to Malaysia reached 26.8 million in 2016, an increase of 4.0% compared to 2015. Tourism receipts rose by 18.8% y-o-y to MYR 82.1 billion compared to MYR 69.1 billion in 2015. Tourism Malaysia is targeting a total of 31.8 million international tourist arrivals in 2017 with tourism receipts of MYR 118 billion. Malaysia’s stronger tourism performance in 2016 is attributed to improved flight accessibility as well as currency depreciation making it a more affordable destination for international tourists.

By 2020, the vision is to achieve 36 million tourist arrivals and MYR 168 billion in tourism receipts.

Approximately 2,200 rooms opened in 2016, an increase of 5.3% y-o-y. New openings in 2016 include the 383-room Holiday Inn Express Kuala Lumpur City Centre, the 247- room Oasia Suites Kuala Lumpur, the 208- room St Regis in KL Sentral and the 347- room The Cosmos Hotel Kuala Lumpur along Jalan Ampang. The majority of the new supply, or 72%, was in the midscale segment, with the St Regis the only new luxury hotel to open in 2016. Kuala Lumpur is predominantly a corporate market with strong weekday business, but relatively little leisure demand and lower weekend occupancy. Singapore was the top source market to Malaysia in 2016 and accounted for 13.3 million or 49.6% of all international tourist arrivals to Malaysia, an increase of 2.6% y-o-y.

Second to Singapore was Indonesia with 3.0 million arrivals, an increase of 26.7% and thirdly Mainland China with 2.1 million arrivals, a significant growth of 9.4% y-o-y.

Over supply of hotel rooms remains a key concern in Kuala Lumpur despite the Malaysian governments continued commitment to promoting the city as a key MICE destination. It is estimated that approximately 9,000 new hotels rooms are in the pipeline between 2017 and 2022, 33% of which will be in the luxury segment and a further 62.4% in the upscale segment. While not all of this supply is guaranteed, it is a concern for a city which is already experiencing significant pressure on rates and occupancy. Quick Facts International Visitor Arrivals (Malaysia 2016) Number of New Rooms (2017) OCC ADR RevPAR 26.8 million 2,771 rooms 68.7% MYR 537 MYR 369 St Regis Kuala Lumpur 208 rooms Sunway Pyramid Hotel West 401 rooms New notable hotels There were no hotel Transactions in H2 2016 Notable hotel deals Element Kuala Lumpur W Hotel Kuala Lumpur Four Seasons Place Kuala Lumpur Fairmont Kuala Lumpur Alila Bangsar Upcoming hotels Note: Kuala Lumpur Hotels refers to Luxury and Upscale Source: STR Global (YTD March 2017), Tourism Malaysia, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy 11 Hotel Destinations – Asia Pacific

Macau Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) ADR RevPAR 31 million 2,000 rooms 85.2% MOP 1,372 MOP 1,169 The Parisian 3,000 rooms Wynn Palace 1,700 rooms New notable hotels There were no hotel Transactions in H2 2016 Notable hotel deals The 13 MGM Cotai Lisboa Palace Palazzo Versace Macau Roosevelt Hotel Macau Upcoming hotels Tourism Supply Demand Outlook In 2016, international visitor arrivals to Macau stayed relatively flat, improving by 0.8% y-o-y to 31.0 million. The gaming industry showed signs of recovery with data released by Macau’s Gaming Inspection and Coordination Bureau recording gross gaming receipts rising 3.1% to MOP 19.3 billion in January 2017.

According to the Macau Government Tourism Office, total hotel rooms in Macau amounted to 37,634 rooms with a 13.9% increase in supply compared to 2015. The growth in supply was contributed mainly by two major hotel openings in 2016: Wynn Palace (1,700 rooms) and at almost double the size Parisian (3,000 rooms). Upcoming major supply additions include MGM Cotai (1,500 rooms) scheduled to open during the second half of 2017, and the ultra-luxury hotel “The 13” (200 suites) scheduled to open in early 2017.

Note: Macau refers to Marketwide hotels Source: STR Global (YTD March 2017), Macao Government Tourism Office, Gaming Inspection & Coordination Bureau Macau, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy With a total of 20.5 million visitor arrivals recorded in 2016, Mainland China remained Macau’s top source market, contributing 66.1% to total visitor arrivals.

Following a drastic fall in 2015, the Mainland Chinese market gained some momentum in December 2016, growing by 7.8% compared to December 2015, ending the year with a 0.2% negligible improvement. Macau’s economy is driven by the gaming sector. However, casino operators are keen to diversify into other non-gaming sectors including theme parks, sporting and other entertainment options as well as the international MICE market. To attract more visitors, the government is also improving infrastructure including the development of the Taipa Ferry Terminal, the Macau Light Rapid Transit and the development of a large scale integrated development zone with strong finance, technology, and leisure generators on Hengqin Island.

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Tourism Maldives Supply Demand Outlook In 2016, the Ministry of Tourism launched the ‘Visit Maldives Year 2016’ campaign, aiming to attract 1.5 million international visitors for the first time. As part of the campaign, the government conducted various national and international activities to strengthen the Maldives’ brand and market the country as an exclusive destination. According to the Ministry of Tourism, a total of 122 resorts with 26,089 beds, 16 hotels with 1,713 beds, 373 guest houses with 5,509 beds and 142 safari vessels with 2,608 beds were registered in the Maldives as at October 2016.

Of the registered capacity, 28,052 beds are considered operational, comprising 24,516 beds in 114 resorts, 1,509 beds in 13 hotels, 929 beds in 58 guest houses and 1,098 beds in 63 vessels. New hotel openings in the Maldives are less common compared to city or other established resort destinations because of the high cost of construction and level of expertise required in operating a resort. Nevertheless, we are aware of five openings in 2015 and a further ten in 2016, adding 1,316 rooms to supply.

Note: Maldives Hotels refers to Marketwide Source: STR Global (YTD March 2017), Ministry of Tourism, Arts & Culture, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy As the leading source market to the Maldives, Mainland China made up about 29.1% of total visitor arrivals in 2015, approximately three and a half times that of the second largest source market, Germany. Growth in the Mainland Chinese market has been remarkably fast over the past few years, from 60,666 visitors in 2009 to 324,326 in 2016. The latest tourism numbers indicate that while Mainland China remains the leading source market, comprising 20.2% of the market as at YTD March 2017, overall arrivals fell by 7.8% y-o-y.

Despite the challenging macro environment, the Maldives government remains committed to growing and investing in its tourism market. The Maldives Marketing & Public Relations Corporation launched the ‘Visit Maldives Year 2016’ marketing campaign early this year and has organised a series of trade road shows in Tier One cities in India such as New Delhi, Bangalore, Kolkata, Mumbai and Chennai. Looking forward, while the operating market is likely to be challenging in the short term, we expect that increased marketing campaigns, ongoing tourism infrastructure improvements and increased airlift from other markets will benefit the medium to long term prospects of the Maldives.

Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) OCC ADR RevPAR 1.3 million 1,316 rooms 69.0% USD 843 USD 582 Amilla Finolhu 125 rooms Amari Havodda 120 rooms Furaveri Island Resort & Spa 105 rooms Atmosphere OZEN 90 rooms Four Seasons Voavah Private 7 rooms New notable hotels Grand Park Kodhipparu J Resorts Kuda Rah Zitahli Kuda Funafaru Resort & Spa Notable hotel deals Zitahli Resort & Spa (to be rebranded to Noku) JW Marriott Maldives Centara Hudhufushi Resort & Spa Pullman Maldives Cheddi Dhapparu Upcoming hotels 13 Hotel Destinations – Asia Pacific

Manila Quick Facts International Visitor Arrivals (Philippines 2016) Number of New Rooms (2017) ADR RevPAR 5.9 million 3,101 rooms 70.6% USD 107 USD 75 Tourism Supply Demand Outlook Total international visitor arrivals to the Philippines reached 5.8 million in 2016, an increase of 12.9% compared to 2015. As at YTD February 2017, international visitor arrivals reached 1.2 million, an increase of 13% y-o-y. Tourism activities as at YTD February 2017 generated earnings amounting to PHP 40.1 billion, down by 18.9% y-o-y from the 49.4 million achieved in the corresponding period of the previous year.

Regionally, East Asia contributes the majority of international visitor arrivals to the Philippines, accounting for 52.6% as at YTD February 2017, or 0.6 million. Approximately 2,429 rooms opened in 2016, an increase of 7.3% y-o-y. New openings in 2016 included the 576-room ShangriLa at the Fort in Bonifacio Global City, the 347-room Conrad Manila at the Mall of Asia Complex, Phase 2 of the Marriott West Wing at Resorts World Manila, which added 228-rooms to the existing hotel and the 396- room Novotel Manila Araneta Center. In March 2017, the Okada Manila celebrated its grand opening, and the USD 2 billion integrated resort casino will house over 500 table games, more than 3,000 electronic gaming machines and 993 hotel rooms.

Note: Manila Hotels refers to Marketwide Source: STR Global (YTD March 2017), Philippines Department of Tourism, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy As at YTD February 2017, South Korea is the biggest visitor-generating market to the Philippines, with total arrivals of 0.3 million, or 25.2%, of the total. The USA is the second largest market, followed by Mainland China, Japan and Australia. Among the top ten source markets, India showed the highest growth of 28% y-o-y followed by Mainland China at 25.4% y-o-y. Other markets which enjoyed substantial growth were Vietnam (+30.0%) and European countries such as France (+27.6%) and Russia (+29.2%).

Manila remains attractive to both the corporate and leisure markets given its status as a hub for the BPO sector and the rapidly developing integrated resorts in the Manila Bay area. Belle Corp recently announced that it is considering an extension of the City of Dreams, Manila integrated casino resort as it is currently operating at full capacity. Belle Corp has an 8,500 square metre piece of land across from the City of Dreams that could serve as a non-gaming expansion of the resort. The continued development of the gaming industry in Manila will help attract more leisure demand and transform the local tourism industry.

Shangri-La at The Fort 576 rooms Novotel Manila Araneta Center 396 rooms Conrad Manila 347 rooms Marriott West Wing – Resort World Manila 228 rooms New notable hotels There were no hotel transactions in H2 2016 Notable hotel deals Okada Manila Grand Hyatt Manila Sheraton Manila Savoy Hotel Newport City Mandarin Oriental Manila Upcoming hotels OCC 14 Hotel Destinations – Asia Pacific

Tourism Melbourne Supply Demand Outlook In 2016, a total of 36 million visitor nights were spent in Melbourne City representing 6.1% of all visitor nights in Australia. International visitor nights accounted for 64.5% and domestic nights accounted for 35.5%.

Domestic visitor nights in Melbourne increased by 11.1% y-o-y and international visitor nights in Melbourne increased by 3.8% y-o-y. During H2 2016, approximately 340 rooms were added into the market, including Punthill Northbank Melbourne (130 guest rooms), the QT Hotel Melbourne (184 guest rooms) as well as the completed extension of the Stamford Plaza Melbourne (26 guest rooms). So far in 2017, the Four Points by Sheraton Docklands is the only hotel that has opened. Looking forward we are aware of five short term accommodation developments currently under construction and due for completion by 2020.

If all projects materialise, this will represent an increase of 1,498 rooms of 7.6% on the existing stock.

Note: Hotel supply within the Melbourne City Region Source: STR Global (YTD March 2017), Tourism Research Australia, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Mainland China is Melbourne’s largest source market, contributing 31.9% of all international visitor arrivals in 2016. Melbourne’s calendar of major global events and international conference program is a draw card for visitors to the city and has contributed to the growth in the accommodation market. A strong calendar of international events in the second half of the year, including the Melbourne International Film Festival, AFL Grand Final as well as Melbourne Cup Carnival and Boxing Day Test Match saw leisure demand increase over the balance of the year.

Melbourne’s accommodation market has experienced a robust level of growth over the last five years capitalising on the city’s extensive calendar of events and the closure of the Sydney Convention and Exhibition Centre between 2014 and 2016. Melbourne City also has a long history of investment in tourism and transportation infrastructure as well as successfully marketing of the city nationally and globally. Notwithstanding this, the underlying market buoyancy of recent years is anticipated to moderate slightly over the medium term as the development pipeline continues to build. Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) OCC ADR RevPAR 1.7 million 273 rooms 88.3% AUD 218 AUD 192 Ibis & Novotel Little Lonsdale Street Novotel Southbank Melbourne W Hotel Melbourne Upcoming hotels Four Points by Sheraton 273 rooms QT Hotel Melbourne 184 rooms Punthill Northbank Melbourne 130 rooms Stamford Plaza Melbourne Extension 26 rooms New notable hotels Novotel on Collins Hilton South Wharf Travelodge Docklands Notable hotel deals 15 Hotel Destinations – Asia Pacific

Osaka Tourism Supply Demand Outlook In 2016, a total of 15.6 million visitor nights were spent in Osaka City. The number of international accommodation guests which accounts for around one third of total accommodation guests in Osaka, increased by 22.8% y-o-y. The number of domestic accommodation guests also increased by 5.4%. New rides added to Universal Studios Japan (USJ) as well as seasonal exhibitions and events have benefited the tourism industry in Osaka. According to Japan Ministry of Health, Labour and Welfare, hotel and ryokan supply in Osaka City accounted 678 properties (59,272 rooms) as at March 2016.

There have been limited new additions to supply of full-service hotels however, there were approximately 450 new and refurbished rooms that commenced trading.

Note: Osaka Hotels refers to Marketwide Source: STR Global (YTD March 2017) Japan Tourism Agency, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy International demand remained strong in Osaka in 2016, although growth has slowed as compared to 2015, mainly driven by the JPY appreciation trend that started in the second half of 2015. Airbnb has definitively made an impact on the local hotel market. According to a recent Airbnb press release, Osaka prefecture recorded the highest usage rate in Japan last year. In January 2017, a new terminal designated for low cost carriers commenced operation at Kansai International Airport and it is expected to boost incoming tourism numbers.

The supply pipeline remains limited with the bulk of new hotels categorised as limited-service hotels. Osaka is expected to witness flat trading performance in 2017 as international tourism growth is expected to be the same, coming of a strong 2015-16 that was unsustainable after visa restrictions on countries including China were lifted causing record inbound numbers. Quick Facts International Accommodation Guests (2016) Number of New Rooms (2017) ADR RevPAR 9.4 million 164 rooms 78.9% JPY 23,035 JPY 18,170 Premier Hotel Cabin Osaka (Rebranded) 240 rooms Natural Hot Spring Onyado Nono Namba 168 rooms Conrad Osaka 164 rooms Hotel Trad 47 rooms New notable hotels Hyatt Regency Osaka Hotel Vista Grande Osaka Notable hotel deals Hotel WBF Yodoyabashi Minami Upcoming hotels OCC 16 Hotel Destinations – Asia Pacific

Tourism Phuket Supply Demand Outlook International visitor arrivals through Phuket International Airport reached 4 million visitors in 2016, recording an improvement of 15% over 2015. The resurgence of Russian visitors was a key driver in tourist arrivals. Further growth is expected in 2017 with airport statistics already indicating growth in the early months of the year. In September 2016, the expansion of Phuket International Airport was completed which increased capacity from 6.5 million to 12.5 million per year.

During 2017, approximately 950 rooms are expected to enter the market, of which 101 rooms have been completed as at March 2017.

The west coast (including Patong, Kalim and Kamala) remains the most popular location for new developments, comprising approximately 60% of future supply between 2017 and 2020. Note: Phuket Hotels refers to Marketwide Source: STR Global (YTD March 2017), Department of Tourism Thailand, Ministry of Tourism and Sports Thailand, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy In 2016, Mainland China, Russia and Australia remained Phuket’s top three source markets, according to arrivals passing through immigration at Phuket International Airport. Despite continuing to account for almost 40% of international arrivals through Phuket, Mainland China showed slower growth compared to previous years as a result of the year-end crack down on zero dollar tours.

The fastest growing source market was Russia, as visitor arrivals saw a resurgence, improving 47.4% y-o-y in 2016.

Despite the halt on zero-dollar tours by the Thai authorities, the increase in the number of high-value Chinese independent travellers and the growth of the niche honeymoon market as well as a resurgence of the Russian market have all kept the island’s tourism industry positive. With the rise of these new markets, we expect Phuket to benefit from a positive outlook with limited new supply. Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) OCC ADR RevPAR 4.0 million 950 rooms 87.9% THB 5,131 THB 4,512 Rosewood Phuket The Hermitage Kata Phuket Mövenpick Resort Mai Khao Phuket (Formerly D Varee Mai Khao Beach Phuket Resort) Upcoming hotels Fishermen's Harbour Urban Resort 389 rooms Wyndham Grand Phuket 214 rooms Hyatt Place Phuket Patong 161 rooms New notable hotels Boathouse Resort on the Beach Phuket Notable hotel deals 17 Hotel Destinations – Asia Pacific

Seoul Quick Facts International Visitor Arrivals (South Korea 2016) Number of New Rooms (2017) ADR RevPAR 17.2 million 1,362 rooms 71.7% KRW 95,172 KRW 68,284 Tourism Supply Demand Outlook Total visitor arrivals to South Korea were 17.2 million in 2016, representing an increase of 30.3% compared to 2015. As of YTD March 2017, international visitor arrivals increased 3.2% y-o-y to reach 3.7 million visitors. Improving visitor arrivals in 2016 were largely attributed to the record influx of Chinese tourists, buoyed by concerted marketing efforts and the easing of visa rules to target a growing group of Chinese independent tourists.

The ongoing difference of opinion between South Korea and Mainland China over the deployment of THAAD missile system has drastically affected relations between both countries, resulting in a significant fall in Chinese tourism demand.

According to JLL estimates, approximately 3,588 rooms opened in 2016, representing a 5.9% y-o-y increment. Most of the recent hotel openings were concentrated in the Myeongdong area. Recent openings include the 430-room Lotte City Hotel Myeongdong, the 409-room Courtyard by Marriott Seoul Namdaemun, the 576-room Tmark Grand Hotel Myeongdong and 408-room Nine Tree Myeongdong II. In 2017, approximately 1,362 rooms are in the pipeline. Note: Seoul Hotels refers to Midscale & Economy Source: STR Global (YTD March 2017), Seoul Tourism Board, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy As of YTD March 2017, Mainland China remained as Seoul’s largest source market, contributing 40.9% of total visitor arrivals.

This is followed by Japan contributing 16.1% of total visitor arrivals. Most of the key source markets experienced y-o-y growth in YTD March 2017. The exceptions were Mainland China and Hong Kong, which registered decreases of 9.2% and 3.8% respectively. The significant fall in Chinese tourists underscore the negative impact on South Korea’s tourism sector arising from the ongoing THAAD dispute, in which Beijing recently banned its travel agencies from offering travel packages to South Korea in March 2017.

Investors continue to pay close attention to the ongoing THAAD dispute, which could undermine stability in the region. Considering that Mainland China is the largest source market to South Korea, any changes in relations between both countries is bound to have a ripple effect on South Korea’s tourism sector. Nevertheless, local tourism and hospitality businesses which have overly relied on Chinese visitors are currently reassessing developments, looking to attract more visitors from other countries and promoting domestic travel. Courtyard by Marriott Namdaemun 409 rooms Nine Tree Myeongdong II 408 rooms Shilla Stay Guro 310 rooms Aloft Seoul Myeongdong 223 rooms New notable hotels Conrad Seoul Belle Essence Hotel Seoul Solaria Nishitetsu Seoul Notable hotel deals Lotte Signiel Hotel Seoul Ramada Encore Seoul Magok Four Points by Sheraton Seoul Gangnam Upcoming hotels OCC 18 Hotel Destinations – Asia Pacific

Tourism Seychelles Supply Demand Outlook With the benefit of improving flight connectivity, Seychelles Tourism Board’s strategy to focus on Asia to decrease reliance on the European market has worked well, evidenced by the healthy growth in Indian and Mainland Chinese visitor arrivals in the past five years. In 2016, the Indian and Mainland Chinese source markets comprised together approximately 8.5% of total visitor arrivals, which is a slightly higher proportion compared to 2015, when the two source markets combined comprised 7.8%. According to the Seychelles Tourism Board, there are around 35 large hotels with 2,360 hotel rooms as at end of 2016.

Most of the hotels are concentrated on Mahé and Praslin, where air access is easier due to the presence of airports. In the past, the Seychelles hotel market supply has been dominated by small owner-operated properties. However, in recent years, there has been a proliferation of international branded hotels, approximately 44.8% of the large hotel rooms are brand affiliated. Some of the international brands include Le Meridien, Four Seasons, Hilton, Avani, Raffles, Berjaya, Banyan Tree and Six Senses.

Note: Seychelles Hotels refers to Marketwide Source: STR Global (YTD December 2016), Seychelles Tourism Board, JLL ADR - Average daily rate, RevPAR - Revenue per available room, OCC - Occupancy Last year, the top three source markets remained France (14.2%), Germany (13.0%) and UAE (7.9%). France has traditionally been one of the largest source markets to Seychelles due to its historical connection and similar cultural tradition. However, due to France’s sluggish economy and the cancellation of direct flights in 2011, the French source market has been stagnant in the past five years. However, with the introduction of direct flights from Paris to Mahé in 2015, the French source market grew to 40,297 visitor arrivals.

Although Seychelles has not achieved the same level of tourism growth as the Maldives over the past few years, the country has the potential to improve in the short to medium term. Improvements in air infrastructure and accessibility will be critical to its success, as evidenced by the new direct flights to Paris and Mainland China having generated a significant increase in international visitor arrivals. A likely impediment for tourism demand in Seychelles would be the spill over effect of ‘Brexit’ on the European economy, especially given the country’s reliance on European source markets.

However, the increased emphasis on the Asian and Middle Eastern source markets, coupled with continued developments in infrastructure and airlift, are likely to benefit trading performance going forward.

Quick Facts International Visitor Arrivals (2016) Number of New Rooms (2017) ADR RevPAR 303,000 127 rooms 66.8% USD 333 USD 222 OCC Four Seasons Desroches Island Upcoming hotels Carana Beach 40 rooms Six Senses Zil Pasyon 30 rooms The Oasis Hotel & Restaurant 30 rooms New notable hotels There were no hotel transactions in 2016 Notable hotel deals 19 Hotel Destinations – Asia Pacific