Ascott targets to double fee revenue to over $500 mil in next five years
In the next five years, The Ascott Limited – the lodging business unit of Capitaland Investment – aims to double its fee revenue to more than USD500 million, off a base of USD258 million achieved in FY2022, which is its highest earnings on record. This growth was buoyed by robust signings and property openings, with the business having already achieved its target of securing 160,000 units by 2023 with the signing of over 4,000 new units in 1QFY2023.
Units span serviced residences, hotels, co-living and senior living brands that are positioned in the mid to luxury range. The fee revenue will be augmented by an anticipated growth rate of 8-10% annually over the next five years, driven by both new property openings and new signings.
CEO of Ascott and Capitaland Investment (CLI) Lodging, Kevin Goh, was optimistic, noting that “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 eightfold 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.”
He also indicated that to achieve their growth targets, the company will continue to “secure more management and franchise contracts for prime properties that generate higher quality fees.” Goh noted that the business was well-positioned to leverage its strong brand equity and direct distribution channels to deliver more value to property owners and customers alike.