CapitaLand Investment’s (CLI) lodging business unit, The Ascott Limited, has targeted to double its fee revenue to over $500 million in the next five years. The target is set off Ascott’s FY2022 base of $258 million, which is its highest earnings on record so far. In FY2022, Ascott’s earnings grew by 36% y-o-y due to its record signings and property openings.
The lodging business also announced that it has hit its target to secure 160,000 units by 2023. The company had signed up over 4,000 new units in the 1QFY2023.
In its announcement, Ascott says it will continue to expand its product offerings that span serviced residence, hotel, co-living and senior living brands and positioned from mid to luxury scale. The business’ fee revenue growth will be driven by new property openings as well as new signings at an expected annual net room growth rate of 8%-10% in the next five years.
“With our asset-light strategy, Ascott has doubled in units every five years, growing from about 20,000 units in 2008 to over 160,000 units today. We are now seeing the positive financial impact of growing our portfolio by eight-fold and will focus on driving even stronger fee growth over the next five years. Over 80% of our total units are under management and franchise contracts, up from 43% ten years ago. These management and franchise contracts typically have sticky recurring fee revenue and long tenures,” says Kevin Goh, CEO for Ascott and CLI Lodging.
“To achieve our new growth target, we will secure more management and franchise contracts for prime properties that generate higher quality fees; and leverage our strong brand equity and direct distribution channels to deliver greater value to property owners and customers,” he adds.
