Frasers Hospitality Trust 'confident' in long-term fundamentals of markets, even as RevPAR dives in Q1

IN a business update, Frasers Hospitality Trust's (FHT) manager said that it is confident in the long-term fundamentals of the markets it has presence in - Singapore, Australia, UK, Japan, Malaysia and Germany - and will continue to prepare for the eventual recovery of international tourism.

"Given the sizeable domestic tourism markets in Australia, Japan and the UK, a rebound in domestic tourism is likely to help FHT's properties in these countries recover sooner than the rest of its portfolio," it said.

The manager added that FHT has ample debt headroom and sufficient liquidity to ride through the Covid-19 period, with the master lease structure of its properties helping to mitigate the adverse impact of the pandemic.

Its Australia portfolio had a quarter-on-quarter improvement of 26.1 per cent in its revenue per available room (RevPAR) in Q1 as two of its hotels secured further contracts for the isolation business, starting from Oct 1, 2020.

However, on a year-on-year comparison, the portfolio RevPAR declined 77 per cent as portfolio occupancy and average daily rate (ADR) declined by 51.1 percentage points and 46.9 per cent respectively.

In Singapore, FHT recorded a lower RevPAR year-on-year due mainly to lower occupancy, but did not provide any figures. It only said that it was 13.6 per cent higher on quarter as ADR improved as Intercontinental Singapore ceased serving as a dedicated stay-home-notice facility.

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The Singapore government's Jobs Support Scheme, which has been extended till March 31, 2021, has helped the properties preserve jobs and conserve cashflow, said the manager.

FHT's UK portfolio RevPAR fell 81.6 per cent year on year and 19.3 per cent quarter on quarter, on the back of lower occupancy due to the resurgence of Covid-19 cases in the UK. All properties, however, continue to benefit from the government's furlough scheme which has been extended till end April 2021.

In Japan, its RevPAR declined 51.7 per cent in Q1 compared with a year ago, but up 60.4 per cent on quarter due mainly to the Japanese government's Go To Travel campaign, a subsidised programme which promotes domestic tourism.

As at Dec 31, 2020, FHT's gearing was at 37.8 per cent, while its weighted average debt to maturity was 3.37 years.

Frasers Hospitality Trust - a stapled trust comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust - owns 15 properties across Singapore, Australia, Britain, Japan, Malaysia and Germany.

Separately, FHT announced late on Wednesday that its chief executive Colin Low Hsien Yang has resigned - after less than two years in the role - to "pursue other professional interests outside the real estate industry". His resignation is effective April 10, 2021. The managers are now recruiting a replacement.

FHT's units ended Thursday at 50 Singapore cents, down one Singapore cent or 1.96 per cent.