Best ways to grow in APAC

SINGAPORE — Aimbridge Hospitality Chief Global Growth Officer Eric Jacobs said the white-label, third-party manager is an international company, but not yet global, because it isn’t in Asia Pacific. But Aimbridge is quickly looking to change that.

“Our CEO, Craig Smith, was the leader out of Hong Kong for Marriott for a number of years and has challenged me to come here and find the right partner and right family and begin an office here,” Jacobs said. “So, that’s why I’m here this week and part of my growth plan is to identify opportunities here, broadly through Asia, so that we can partner.”

Jacobs said Plano, Texas-based Aimbridge is an asset-light company but that doesn’t mean it won’t co-invest in properties with other owners and investors.

That’s why I’m [in Singapore] this week and part of my growth plan is to identify opportunities here, broadly through Asia, so that we can partner.

Eric Jacobs

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“We do our best to identify opportunities, both to acquire opportunities that are currently in our system, or stay on top of all the hotels that might be being developed or going for sale in a particular area, but those owners and investors need local knowledge, underwriting and investment as well.”

Jacobs was part of a “Global Strategy and Development” panel on the second day of the 35th annual Hotel Investment Conference Asia Pacific (HICAP) in Singapore. The panel included Catherine Chan, CDO of Singapore-based Hotel 101 Global Pte. Ltd.; Kar Ling Wong, chief strategy officer and managing director, Southeast Asia for Singapore-based The Ascott Ltd.; Camil Yazbeck, global chief development officer for Paris-based Accor; and Maria Zarraluqui, vice president of development for Palma, Spain-based Meliá Hotels International. Shyn Yee Ho, director, Asia Pacific at Horwath HTL, served as moderator.

Yazbeck said one of the key extra development opportunities that Accor is seeing is in mixed-use development.

“The mixed uses are growing tremendously because owners are looking to diversify their risk. So, when you diversify your risk and you have a hotel element, you also have a little bit of extended-stay,” he said. “We have quite a lot of these brands that utilize the same idea (Pullman, Mövenpick). We go into the living sector so it gives a base occupancy on some of those rooms.”

But Yazbeck said the biggest uptick for Accor has been branded residential.

“We’re actually the largest outside of the U.S. in branded residential because it allows the owner to actually sell at a premium versus a normal residence,” he said. “We’ve seen that banks are more happy to lend and the cap rates at the end of the day will compress, improving the asset value overall, because you have all of these [mixed-use] elements together.”

What makes a great partnership

When asked what defines a great partnership between owners, developers, and operators, Zarraluqui said it’s the confidence to know who you are working with.

“From a work perspective, we always talk about a long-term partnership with our investors or owners because, first of all, Meliá is a company that is big enough but also small enough, and we come from an ownership [perspective],” she said.

Because Meliá has ownership experience, it helps the company always think about what an owner wants and needs, Zarraluqui said.

“We are flexible for those long-term relationships… This is very well perceived from the owners because with all these massive numbers from brands… you can lose track of the relationship between the owners and the hoteliers,” she said. “We strongly believe that we can make the association a more personal-based relationship. Every time we sign a deal, we always think about the 360-degree experience of the hotel and the owner from the moment they conceive a project up to the moment maybe they dispose of the project because we have done it ourselves.”

Wong said having an owner’s mindset can help companies like The Ascott Ltd. be better business partners.

It allows us as developers to work with different local developers that want to work with us… Owners who want to invest with us build and then can actually keep the units that are allocated to them, but we can also work with developers who have a very quick exit strategy.

Catherine Chan

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“It’s all about the value that you can bring and it’s also understanding what is important to the ownership and really making sure that we’re able to generate the cash flow and deliver the returns,” she said. “Having an owner’s mindset helps us look at things and whether we really need to be rolling out initiatives. A lot of it really is looking at it from a value perspective and making sure that we bring value to the owners’ real estate at the end of the day.”

While Hotel101’s model is different (because each hotel room at a new project can have different micro-owners), Chan said the company approaches each project in different stages, from developing and building the property to selling each unit.

“It allows us as developers to work with different local developers that want to work with us… Owners who want to invest with us build and then can actually keep the units that are allocated to them. But we can also work with developers who have a very quick exit strategy.”

Regardless of who the owners are, Chan said Hotel101 keeps a constant relationship with owners because it is still operating the property.

“The condo-hotel model isn’t new, but it hasn’t been the most positive in the past. I think that we’ve simplified the model,” she said. “That’s the ultimate skin in the game, where we’re staying on as the operator and we’re staying on to ensure that unit owners are happy with their investment.”