Ascott to expand apartment hotel business in China through joint venture with Jin Jiang
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Representatives from Ascott and Jin Jiang Hotels unveil their partnership at an event held on Oct 23.
PHOTO: THE ASCOTT
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SINGAPORE – The Ascott Limited, a Singapore-headquartered hospitality company, will expand its apartment hotel business in China through a joint venture with Jin Jiang Hotels.
Jin Jiang is China’s largest hotel group and the world’s second-largest, according to a statement on Oct 23 by Ascott, citing third-party data.
Ascott is the lodging business unit of CapitaLand Investment.
The partnership was unveiled at an event celebrating Ascott’s 40th anniversary on Oct 23.
Under the joint venture, more apartment hotels under Ascott’s Quest and Jin Jiang’s Tulip Lodj brands will be developed and managed in China.
The expansion, which will take place under a primarily franchise model, is expected to serve an unmet demand in China for more upscale and upper-midscale apartment hotels, Ascott said.
To start off, the joint venture company will manage two operational hotels in Wuhan and one still undergoing development in Shenzhen. The hotels are franchised under Tulip Lodj and house a total of 600 rooms.
There are also plans to further expand the number of hotels under Tulip Lodj and launch Quest in China through franchised partnerships, Ascott said.
A hotel franchise model is a business arrangement where a hotel brand or a franchisor allows an independent hotel owner or operator, the franchisee, to use its brand, trademarks and business systems in exchange for fees.
On why Ascott and Jin Jiang opted for the franchise model to expand business in China, Ascott’s chief executive Kevin Goh said 90 per cent of Ascott’s global portfolio already operates under management and franchise agreements.
“We remain focused on advancing our asset-light strategy for further growth,” he added.
Citing a report by hospitality consulting brand Horwath HTL, Mr Goh said that 68 per cent of new hotel signings in China in the first half of 2024 are franchise contracts, up from 61 per cent a year ago.
Ascott declined to disclose the financial investment that has been put into the joint venture to date, and does not yet have a projection for the number of properties it aims to open in China, where it currently operates more than 220 properties in more than 40 cities.
It, however, added that its partnership with Jin Jiang is expected to benefit both hotel groups, enabling each to leverage on the other’s strengths.
While Jin Jiang is a predominant player in the China hotel industry with a larger network and more resources, it does not have as much experience as Ascott in developing serviced apartments, Mr Goh said in a panel discussion during the event.
Jin Jiang, with its great network of hotel owners, is also aware of what Chinese investors want from investing in hotels, said Ascott China’s managing director Joseph Wong.
