WHAT ’ S HOT
D E V E L O P M E N T
WHAT ’ S HOT
D E V E L O P M E N T
LUXURY
NEW LOOKS IN
W ith French luxury group LVMH acquiring 46 luxury hotel , restaurant , train and river cruise properties from Belmond Ltd ., and IHG taking Bangkok-based Six Senses Hotels Resorts Spas , new names continue to emerge in the luxury segment .
Accor , never really known for luxury , has moved upmarket with its acquisitions of the Fairmont and Raffles brands , as well as its 50 % stake in luxury lifestyle player SBE and an alliance with the owners of the Orient-Express brand .
LVMH recently announced plans to bring its tony Cheval Blanc brand to London ’ s Mayfair district , complete with a Louis Vuitton café . Another Cheval Blanc is due at year-end in former department store La Samaritaine in Paris .
IHG paid US $ 300 million to purchase Six Senses from Pegasus Capital Partners , putting the U . K . -based giant more firmly into luxury , especially after its 2018 acquisition of the Regent brand . Six Senses CEO Neil Jacobs says IHG was interested in Six Senses partly because of its pipeline
Lobby at the Cadogan , London , a former Belmond property now owned by LVMH
of six hotels on top of its current 18 properties . “ Even alone without IHG , we would be at 40 hotels ( globally ) in three to four years just with what we ’ ve got ,” he told HOTELS earlier this year .
“ We love clusters … We ’ re opening later this year in Israel in the Negev Desert . So now I ’ m focused on ( whether ) I need to be in Tel Aviv or Jerusalem or north of Tel Aviv ,” Jacobs said . “ We ’ re just opening ( five lodges ) in Bhutan and we ’ re looking at the same in Myanmar .” Six Senses also signed an LOI in the Galápagos . — J . W .
MIDSCALE BOOMING IN CHINA
The investment in China ’ s hotel industry is gradually moving from robust growth to more rational . Hence , the proportion of upscale to luxury hotels will gradually decrease , forming a more typical pyramid structure .
Overall , international chain brand hotels are still in a high-speed growth period in China . The development of new districts in key secondary cities and the growth of vacation demand have provided good opportunities for international hotel chains . The number of contracts signed in China by global brands in the midscale and above segments reached 566 in 2018 , a 26 % year-over-year increase buffeted predominantly by midscale deals . Domestic tourism has vastly expanded the customer base for midscale brands as the so-called consumption upgrade shifts preference from local budget hotels to internationally branded , higher-quality midscale properties .
At the same time , decelerating economic growth and tightening real estate regulations have made investors more cautious about developments . So the investment focus has shifted from upscale and luxury to the midscale segment , which typically delivers much stronger returns .
International hotel chains licensing local partners also contributed to the segment ’ s boost . With the push from both supply and demand sides , and despite the slightly lower year over year growth rate of midscale brands in 2018 , the segment will maintain its prevalent position due to the strong market demand and the pursuit of higher financial returns .
CATHY LIU is a consultant in Horwath HTL ’ s Beijing office .
28 hotelsmag . com June 2019