THE China business segment of Ascott has entered into a joint venture (JV) with Jin Jiang Hotels to expand their respective apartment hotel brands in China.
Ascott China will hold a 50 per cent interest in the JV, with Jin Jiang Hotels (China region) to hold the balance.
Ascott, the wholly owned lodging business unit of CapitaLand Investment (CLI), on Wednesday (Oct 18) said the tie-up will boost the growth of its Quest brand and Jin Jiang’s Tulip LODJ to meet China’s demand for apartment hotels in the upscale and upper midscale segments.
The JV company will manage about 600 units spread across two operating properties in Wuhan and one pipeline asset in Shenzhen franchised under Tulip LODJ.
“Plans are underway to broaden the footprint of Tulip LODJ and launch Quest in China by providing opportunities for franchised partnerships,” said Ascott.
Jin Jiang Hotels is China’s largest hotel group with about 13,250 operating hotels and more than 1.3 million rooms.
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Kevin Goh, chief executive officer for Ascott and CLI lodging, said: “The collaboration will accelerate our asset-light expansion in China by leveraging Jin Jiang’s franchise-ready infrastructure.”
He added: “With 90 per cent of Ascott’s global portfolio already operating under management and franchise agreements, we remain focused on advancing our asset-light strategy for further growth.”
Goh is also positive on China’s hotel franchising industry, which he says is maturing.
He noted that 68 per cent of new hotel signings in China in the first half of 2024 are franchise contracts. This was up from 61 per cent recorded in 2023, and more than the average of 62 per cent in regions outside the US.
Lee Ngor Houai, Ascott’s chief operating officer for Europe, the Middle East, Africa, South Asia, and China, also said that bleisure – a blend of business and leisure travel – is on the rise in China, thus creating a robust demand for apartment hotels.
Shares of CLI were trading down 0.7 per cent or S$0.02 at S$2.94 before the mid-day trading break on Wednesday.
