In addition to acquiring stand-alone properties, overseas
investments are also expanding upon existing platforms. Besides
investing in US-based hotel management companies, this cycle is
also witnessing an expansion of Asian-based hotel management
companies. For example, Wanda Group, one of the largest
commercial developers in China, is developing billion-dollar mixeduse
projects in London, Chicago and Australia’s Gold Coast in order
to build luxury hotels utilizing the company’s five-star hotel brand.
The developer’s ambitious goal is to build at least 15 luxury hotels
in 15 international cities by 2020 and expand its China-based hotel
brand. Another example is a Hong Kong-based company, which is
acquiring four- and five-star hotels to reflag under its luxury hotel
brand and three-star hotels to convert to its newly formed lifestyle
hotel brand.34
Considering the current geopolitical environment in Asia, limited
investment opportunities in their home countries and the perceived
stability in Western countries, Asian investors will continue to be
major players in global capital markets in 2015 and beyond. In
addition, increasing outbound China tourism is expected to fuel
additional Chinese investment in the global hotel market.
While London and New York have been prominent outbound
markets for the past five years, other key cities are beginning to
garner international attention, such as Sydney, which is entering
its third year in the cycle. Moreover, as gateway markets become
more expensive and investors mature, it is anticipated that
outbound activities will expand beyond the most common type of
investment — individual asset acquisitions — to include a greater
number of joint venture and platform-level investments. The
forecast for the global hospitality market is strong, and cross-border
transaction levels are expected to continue to rise, with Asian
investors at the forefront of the activity.