Ascott targets to double fee revenue to over $500 mil in next five years
The Ascott Limited, a lodging business unit of CapitaLand Investment’s (CLI), has announced plans to double its fee revenue to over $500 million in the next five years. With a base of $258 million in FY2022 – the highest earnings on record so far – Ascott’s FY2022 earnings grew 36% year-on-year due to record signings and property openings.
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The business also achieved its aim of securing 160,000 units by 2023, with over 4,000 self-proclaimed new units signed up during 1QFY2023.
As Kevin Goh, CEO of Ascott and CLI Lodging, explained: “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.”
To build on the current success, Ascott is planning to expand its product offerings spanning serviced residences, hotels, co-living and senior living brands, from mid to luxury scale. The firm hopes to drive further growth in fee revenue via new property openings and new signings at an expected 8%-10% net room growth each year over the next five years.
Going on to describe the benefits of the asset-light strategy, Goh added: “These management and franchise contracts typically have sticky recurring fee revenue and long tenures,”
The company is also keen to secure more management and franchise contracts for prime properties generating higher quality fees. Leveraging the brand’s strong equity and direct distribution channels is also essential to deliver even greater value to customers and property owners alike.