HVS Monday Musings: Mixed-use development - The most sustainable model for hotels going forward

By Mandeep Lamba, Akash Datta and Dipti Mohan
Mixed-use developments are going to be the most sustainable model for hotels going forward as they leverage the best of each asset class, while diversifying the risks for the investors and enhancing the overall experience for the guests. Read on to know more.

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Swansea Hotel Acquired by Hunter Group in Lake Macquarie, Australia

Local North Coast group, Hunter Hotels, have acquired the Swansea Hotel located at the Lake Macquarie regions of New South Wales from Australia-based Laundy Hotels at an undisclosed price. Laundy Hotels first purchased the Swansea Hotel in 2016 for AUD13 million off hotelier Phil Bernie. Following the acquisition, Justine Laundy embarked on a significant reconfiguration and renovation program which mainly involved repurposing a building area that had been historically leased to a third party; consequently, resulting in a marked uptick trading performance and overall asset value. The large-format Swansea Hotel sits on a 3,235 square-metre site and is in the heart of the suburb’s retail precinct. It includes a 50-space off-street carpark, and the benefit of 24-hour trading approval with 30 gaming machines. This brings Hunter Hotels’ portfolio up to nine venues in the Maitland, Central Coast and Lake Macquarie regions of New South Wales. The portfolio also includes Kincumber Hotel, Pippi’s at the Point, and Finnegan’s Hotel in Newcastle’s Central Business District.

Singapore and Hong Kong Enters into In-Principal Agreement to Establish Bilateral Air Travel Bubble for Leisure Travel Without Need for Quarantine

Singapore and Hong Kong have reached an in-principle agreement to establish a bilateral air travel bubble, which will exempt travellers from quarantines or stay-home notices. This arrangement represents the first reciprocal travel bubble in the Asia Pacific region and in the world. Under the agreement, there will be no restrictions on segments of the population, itinerary or purpose of travel. But travellers have to undergo mutually recognised testing for a negative COVID-19 result. In addition, they will have to take dedicated flights that do not accept transit passengers. There will be a quota on the number of travellers that can travel between Singapore and Hong Kong but as operations stabilise, the quotas may be increased. The air travel bubble launch date and other implementation details will be announced in a few weeks. Hong Kong has been seeking to form similar travel bubbles with Singapore and ten other destinations including Australia, France, Germany, Japan, Malaysia, New Zealand, South Korea, Switzerland, Thailand and Vietnam.

Singapore and Indonesia Established Reciprocal Green Lane

The government of Singapore and Indonesia have announced a reciprocal green lane between the two countries. The travel application based on the green lane will begin on 26 October 2020. The reciprocal green lane will enable cross-border travel for essential business and official purposes to resume. Eligible applicants for the green lane include Indonesian citizens, and Singapore citizens and residents. According to Indonesian Foreign Minister, Retno Marsudi, Singapore travellers to Indonesia must have sponsorship from an "Indonesian government/business entity". They should also have applied for a visa online through Indonesia's directorate-general of immigration. She also mentioned that Indonesians travelling to Singapore must have sponsorship from a Singapore government agency or an enterprise in Singapore. Indonesians do not have to apply for a visa but must instead apply for a Safe Travel Pass, similar to requirements for visitors from other countries with green lane or fast lane arrangements with Singapore. These travellers will have to abide by the COVID-19 prevention and public health measures mutually agreed upon by both countries. The points of entry and exit would be Tanah Merah Ferry Terminal and Batam Centre Ferry Terminal for sea travel; and Changi Airport and Jakarta’s Soekarno-Hatta International Airport for air travel.

Western Australia Premier Mark McGowan Announced 50,000 Affordable Airfares

Western Australia (“WA”) Premier, Mark McGowan, announced the largest regional aviation deal in WA, more than 50,000 affordable airfares to the North West will be pushed out over the next one year. The deal is a partnership with Tourism WA, Qantas, and Virgin Airlines. Through this partnership, Virgin Australia will be offering airfares between Perth and Broome from AUD199 one-way ‪between 2 November 2020 and 30 October 2021, or to Kununurra from AUD249 one-way ‪between 29 March and 30 September 2021. Qantas will be offering one-way fares between Perth and Exmouth from November 2020 for 12 months, priced at AUD149 one-way during low season from ‪25 October to 27 March, when booked 30 days in advance, and AUD169 during high season from ‪28 March to 30 October, when booked 45 days in advance. This will allow city-based residents to travel to Broome, Kununurra, Exmouth and the surrounding areas, and for North West locals to visit Perth and explore the city, providing a great economic boost for both regions. The program was established to support tourism businesses that were affected by the COVID-19 pandemic.

Absolute Share Price Performance, as on 16 October 2020