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Singapore hotel groups spared property damage in Australia

Some reported fall in visitor numbers due to bushfires, but month of January is also slow season for Aussie hotels

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As thunderstorms in eastern Australia bring some much needed-relief to the bushfires, Singapore-based hospitality companies with a presence Down Under are taking stock of their businesses there.

Singapore

AS thunderstorms in eastern Australia bring some much needed-relief to the bushfires, Singapore-based hospitality companies with a presence Down Under are taking stock of their businesses there.

The impact, however, is expected to vary, with some reporting no damage to property, while others saw a fall in visitor numbers, they said in response to queries from The Business Times.

"As the fires are surrounding the major cities of Melbourne and Sydney, we have seen overall tourism numbers decline," said Neil Maxwell, chief executive officer of M&L Hospitality. "We have not seen any damage to our properties but can expect a dip in forecasted visitor numbers as a result as smoke haze from the bushfires and uncertainty over safety will naturally deter tourists to these cities."

The hotel group owns seven hotel properties in Sydney, Melbourne and Perth, including the Hyatt Regency in Sydney, Novotel Langley in Perth and DoubleTree by Hilton in Melbourne.

Cavaliere Giovanni Viterale, general manager of The Fullerton Hotels and Resorts, reckons it is too early to ascertain the impact of the bushfires on tourism in Sydney, given January is low season.

"First, domestic Australian travel is usually the main business driver for Sydney hotels. Second, the period between New Year and Australia Day on Jan 26 is traditionally a slow period."

The Fullerton Hotel Sydney opened its doors in October last year, marking the first international hotel venture for The Fullerton Hotels and Resorts. The hotel itself is owned by Sino Group and Far East Organization.

Rounding off the rest of its portfolio is The Fullerton Hotel Singapore and The Fullerton Bay Hotel Singapore, so each of the three operating properties "carries great weight" when it comes to contributing to the business. "Australian outbound travel is also a key geographic origin market for The Fullerton Hotels and Resorts," said Mr Viterale.

A spokesman for CDL Hospitality Trusts told BT that downside risks are cushioned for its Australian properties owing to a lease structure which delivers fixed rent in local currency. It owns two hotels in Perth and one in Brisbane, totalling 727 rooms. For the nine months ended Sept 30, 2019, Australia accounted for 6.7 per cent of its net property income for its total portfolio.

Other companies with hotel operations in Australia include Toga Far East (a joint venture between Far East Hospitality Holdings and Toga Hotels), Stamford Land Corp and Bonvests Holdings. They did not respond to queries from BT by press time.

Developer Tong Eng Group - which together with related company TE2 Group has an office portfolio totalling A$400 million in Sydney and Melbourne - also said it hasn't received any reports about its tenants being affected to date.

To help support fire-fighting efforts, some companies have also been making donations in Australia, including Tong Eng, M&L Hospitality and The Fullerton Hotels and Resorts.