Pan Pacific group looks to landmark year with new brand, more hotels

Singapore

THERE'S no stopping the Pan Pacific Hotels Group's (PPHG) diversification and expansion - with 2020 a landmark year as it launches key openings in London, Bangkok, Hanoi, Jakarta, and China.

On its Singapore home ground, there's no let-up, too, as it eyes a possible 10th hotel.

"In terms of growth, our portfolio is nearly 50 properties across 29 cities, from Singapore to Beijing, Sydney, Kuala Lumpur, Tokyo and Toronto," said Choe Peng Sum, chief executive officer of the UOL subsidiary.

"2020 will also be a landmark year with key openings in London, Bangkok, Hanoi, Jakarta, and China's first Parkroyal hotel in the city of Dalian."

The nearly 50 properties include those under development.

This year, the group will open eight properties across its brands, namely Pan Pacific and Parkroyal. PPHG also sees gateway cities in markets such as Vietnam, China, Germany and the United States as promising for future growth.

Today, the group gets around 65 per cent and 16 per cent of its revenue from Singapore and Australia respectively, and the rest from its other properties worldwide. As the group expands its footprint in markets such as Europe and North America, this could rebalance in time, with Singapore accounting for 50-60 per cent of revenue.

On Tuesday, PPHG also launched its latest brand, Parkroyal Collection Hotels & Resorts, characterised by eco-friendly practices as well as a focus on lifestyle and well-being. The new brand sits in the "upper upscale" segment, while the existing Parkroyal brand is positioned as "upscale".

The former Marina Mandarin hotel is being rebranded Parkroyal Collection Marina Bay and is poised to undergo a S$45 million overhaul. Similarly, the Parkroyal on Pickering has been renamed Parkroyal Collection Pickering, making Singapore the first destination to receive the new brand.

In Singapore, PPHG currently has eight hotels and serviced suites, with the ninth - the Pan Pacific Orchard - scheduled to open in 2021 in the Claymore area. Mr Choe hinted at a potential 10th hotel, with Orchard singled out as a possible location.

But with assets typically tightly held in Singapore, the group "will only go in when the yield is right", he highlighted. He also sees room in the group's portfolio for a new lifestyle brand geared towards young travellers, which could be a good fit for the next hotel property that it opens in Singapore.

"Singapore is still doing very well," said Mr Choe. "It's stable, it's growing. We seem to be well placed in a growing market." This comes against the backdrop of tightening supply, with analysts saying that the incoming supply of hotel rooms could clock just 1.1 per cent this year.

According to data from the Singapore Tourism Board, visitor arrivals were up 1.3 per cent to 9.3 million in the first half of 2019, although tourism spend had fallen 3 per cent to S$13.1 billion.

Other factors underpinning a robust outlook for Singapore's hotel industry this year include a busy calendar of new and returning MICE events, some channelled here by the continued protests in Hong Kong.

In Australia, the "performance of the Australian hotels as a whole is lower compared to the previous year, with good performance in Melbourne offset by a situation of oversupply in Sydney and Perth", he said.

The weaker Australian dollar is likely to affect its reporting results this year. He added: "We have observed a slowdown in booking pace and if the bushfires continue, this will have an impact on our properties in Sydney and Melbourne."

Where global expansion is concerned, the group is "going to fire on two barrels", said Mr Choe, who assumed the chief executive role in September last year. "When we go out there, especially in Asia, we will grow through management contracts. We've seen a lot of traction."

Over the next three years, it has a pipeline of 18 properties set to open their doors worldwide, the majority of which are under management contract.

The second barrel will be acquisitions and investments. In London, the company is set to launch a newbuild Pan Pacific that it owns in Bishopsgate in October this year. Despite the uncertainties lingering around Brexit, Mr Choe remains upbeat that London will continue to attract international visitors, although he noted that domestic spending has softened.

Meanwhile, it will be business as usual at the 575-room Parkroyal Collection Marina Bay as it undergoes a facelift slated for completion by March next year. Aside from the hotel rooms, its AquaMarine restaurant, 20,000-square feet of function space and swimming pool will also be renovated. Features will include a garden-in-hotel concept as well as a giant skylight fitted with UV-treated glass for lower energy consumption.

In addition, the group is also planning to renovate the Pan Pacific Serviced Suites Orchard and the Parkroyal Kuala Lumpur.