Ascott aims to double fee revenue to over $500 million in next five years
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Ascott properties in the pipeline for asset enhancement initiatives include The Cavendish London and Citadines Saint-Germain-des-Pres Paris (above).
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Michelle Zhu
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SINGAPORE – CapitaLand Investment’s (CLI) lodging arm, The Ascott, announced plans to achieve fee revenue of more than $500 million over the next five years, about double its financial year 2022 revenue of $258 million.
Fee revenue growth will be driven by new property openings as well as new signings at an expected annual net room growth rate of 8 per cent to 10 per cent in the next five years, the company said on Thursday.
Ascott said it signed more than 4,000 units in the first quarter of this year, which drove the company to exceed its earlier target of securing 160,000 units by 2023.
It also aims to open more than 13,500 units in over 70 properties this year.
“Over 80 per cent of our total units are under management and franchise contracts, up from 43 per cent 10 years ago. These management and franchise contracts typically have sticky recurring fee revenue and long tenures,” said Mr Kevin Goh, chief executive officer of Ascott and CLI Lodging.
“To achieve our new growth target, we will secure more management and franchise contracts for prime properties that generate higher quality fees, and leverage our strong brand equity and direct distribution channels to deliver greater value to property owners and customers.”
Mr Goh said Ascott also has plans to upgrade several of its strategically located properties into brand flagship assets.
Properties in the pipeline for asset enhancement initiatives include The Cavendish London and Citadines Saint-Germain-des-Pres Paris, which will be rebranded under Ascott’s premium serviced residences segment, The Crest Collection.
Shares of CLI closed down one cent or 0.3 per cent at $3.79 on Thursday after the announcement. THE BUSINESS TIMES
