Frasers Hospitality Trust turns to Japan as Singapore and Malaysia businesses sputter

Asset enhancement at Intercontinental Singapore proved disruptive.

The hospitality firm was saved by its diversification after its Japan, Australia and UK properties picked up the slack of its struggling Singapore and Malaysia businesses.

According to analysts from UOB Kay Hian, ANA Crowne Plaza Kobe beat RevPAR estimates at the exact right time by 19.2%, thanks to a surge of international tourist arrivals in Japan.

International travellers to Japan have increased by 49.1% to reach over 12.9m visitors, UOB Kay Hian said. Australia and the UK also beat NPI estimates by 25% and 22% respectively.

Meanwhile, its Singapore and Malaysia businesses sputtered but for different reasons, UOB Kay Hian said. The ongoing asset enhancement initiatives disrupted operations at Intercontinental Singapore, with 84 rooms taken out on average.

“Ongoing AEI at Intercontinental Singapore (S$26m), which is well on track for completion come Feb 16, should see ADR increase by approximately 15% post completion. In addition to sprucing up existing rooms, the refurbishment also allowed for space optimisation, which would facilitate rebranding of rooms (eg single to junior suite),” UOB Kay Hian said.

Malaysia, on the other hand, witnessed dimmer performance due to the lingering fear over aviation tragedies and weak corporate demand from the disappointing oil and gas segment.