Bottom line: Accor’s new tie-up with China Lodging looks like a smart deal that will bring together complementary partners, and is likely to spark a new round of similar cross-border partnerships in the year ahead.
China Lodging moves in with Accor
A development I’ve been predicting for quite a while has finally happened in China’s lucrative but crowded hotel space, with news of a major new tie-up between global giant Accor (Paris: AC) and domestic budget operator China Lodging Group (Nasdaq: HTHT), which also calls itself Huazhu. The tie-up will essentially see China Lodging take over operation of much of Accor’s China portfolio, and could ultimately see Accor purchase the Chinese company outright. The move could also spark a round of similar tie-ups that sees other major foreign operators pair up with Chinese partners like Home Inns (Nasdaq: HMIN). Read Full Post…
Bottom line: Fosun should drop out of the bidding war for Club Med to avoid overpaying for the resort operator, despite big potential from a possible Asia expansion.
Fosun in bidding war for Club Med
Chinese investors aren’t the only companies with big money to spend on global M&A for undervalued western assets. That’s the lesson that high-flying private equity firm Fosun International (HKEx: 656) is quickly learning, as it gets sucked into a bidding war for French holiday resort operator Club Med (Paris: CU). This particular bidding war is one of the first I’ve seen for a major western asset involving Chinese bidders, and could presage more competition from local western investors who want to take advantage of the many assets now now being sold at bargain prices. Read Full Post…
Bottom line: Qunar’s ballooning losses reflect its aggressive spending on market share, which will turn off investors and pressure its stock until it shows signs of moving towards profitability.
Qunar losses swell past revenues
My third-quarter Chinese earnings season officially ends today with the newly issued results of online travel agent Qunar (Nasdaq: QUNR), whose losses appear to be spiraling out of control. Frankly speaking, I could never really understand why investors were so attracted to this company, whose main asset seems to be its association with leading Chinese search engine Baidu (Nasdaq: BIDU), which also happens to be Qunar’s majority stakeholder. Read Full Post…
Bottom line: Ctrip’s explanation for a recent major share sale by top executives looks reasonable and shouldn’t be cause for concern, while Tuniu won’t gain any short-term advantage from its new war with Tongcheng.
Ctrip execs invest in cruising
A couple of news bits are cruising through the online travel space this first week, with industry leader Ctrip (Nasdaq: CTRP) and recently listed Tuniu (Nasdaq: TOUR) both engaged in new strategic moves. In the former case, Ctrip is explaining a recent wave of selling of its shares by top company executives, saying the move was prompted by their need for cash for a new strategic investment. The latter case has Tuniu reportedly engaged in an entertaining behind-the-scenes battle with unlisted rival Tongcheng for the lucrative and fast-growing overseas travel market. Read Full Post…
Bottom line: The record-breaking purchase of an Australian trophy hotel by a China buyer is part of a growing Chinese foreign real estate buying binge, which could ultimately produce a global bubble.
Chinese insurer buys Sydney Sheraton
China’s nascent but rapidly growing appetite for foreign hotels continues to grow, with word that another previously unknown Chinese insurer has snapped up a trophy property in Australia for a record price. In this case it’s China’s Sunshine Insurance Group that’s buying a major Sheraton property in Sydney from global giant Starwood Hotels (NYSE: HOT) for an inflated price of A$463 million, or about $400 million. This sale is the third of a major western hotel asset to a Chinese buyer in just the last 2 months, and looks a lot like similar waves from the past 30 years that saw Asian buyers purchase trophy western real estate at inflated prices. Read Full Post…
Bottom line: Qunar could experience some short-term loss of business due to the withdrawal of Home Inns properties from its site, and its open platform business model makes it prone to such problems.
Home Inns checks out of Qunar lodge
Signs of turmoil are coming from the lodge operated by Qunar (Nasdaq: QUNR), with word that the online travel agent has just lost a major customer with the abrupt departure of leading budget hotel chain Home Inns (Nasdaq: HMIN). The departure of such a major customer, if true, would mark a big blow to Qunar, which had a recent similar break-up with chief rival Ctrip (Nasdaq: CTRP). Home Inns’ decision is motivated by different reasons than Ctrip’s, which I’ll explain shortly. But the 2 spats highlight the fact that Qunar’s business model, which centers on an open platform for third-party travel agents, is far more prone to problems than traditional travel sites that directly sell products like hotel rooms and air tickets to consumers. Read Full Post…
Bottom line: Jin Jiang is emerging as China’s first global hotel brand, but its inexperience and focus on property ownership with its first major acquisition are likely to produce poor results for the campaign.
Jin Jiang checks into Europe
Domestic hotel stalwart Jin Jiang (Shanghai: 600754; HKEx: 2006) is quickly emerging as China’s hotel company to watch on the global stage, with word that it’s on the verge of a deal to buy Louvre Hotels Group, Europe’s second largest operator. The acquisition would be the biggest so far for Jin Jiang, which is China’s only hotel operator to make any serious moves outside its home market. Frankly speaking, I’m a bit surprised that state-owned Jin Jiang is leading this particular global expansion campaign, since I would have expected one of the country’s private hotel operators to be at the forefront of this initiative. Read Full Post…
Wanda Group is already one of China’s leading commercial property owners, and now it’s taking aim at the fast-growing travel sector with word that it’s purchased a major travel agency in affluent Zhejiang province. There’s no financial detail on the deal, but the purchase should help to bolster Wanda’s position that has already made it China’s leading travel company just 2 years after its formation. The group could ultimately become one of China’s leading integrated travel and leisure companies if it eventually lists, providing an attractive alternative to the crowded field of publicly listed firms like online travel agent Ctrip (Nasdaq: CTRP) and leading hotel operator Home Inns (Nasdaq: HMIN). Read Full Post…
Just weeks after Intel (Nasdaq: INTC) unveild a major new tie-up with a leading Chinese microchip maker, the Chinese partner behind that deal is moving ahead with its own drive to consolidate the nation’s fragmented sector for such chips, formally known as integrated circuits (ICs). The Chinese company, Tsinghua Unigroup, is reportedly leading the establishment of a major new fund that will invest in IC designers and manufacturers. While such a fund might normally focus on providing money to start-ups, based on Unigroup’s recent actions it looks more likely that this new entity could become a vehicle for consolidation that is sorely needed in China’s microchip sector. Read Full Post…
My award this year for the world’s most patient company goes to Universal Studios, which has just received the official green light to build one of its trademark theme parks in Beijing after more than a decade of perseverance. I’ll admit I’m writing about this particular story partly for sentimental reasons, since Universal Parks & Resorts first announced its plans to build theme parks in Shanghai and Beijing shortly after I first arrived in Asia in 2002. Now some 12 years later, China’s powerful state planner has reportedly finally given the green light for such a park to be built in Beijing, in an investment totaling more than 20 billion yuan ($3.2 billion). Read Full Post…
After spending most of its life in relative obscurity, Chinese insurer Anbang is suddenly making steady headlines on the global stage with word of 2 major new deals in Europe and Asia, following its landmark agreement last week to buy New York’s storied Waldorf Astoria hotel for nearly $2 billion. The larger of the latest deals has Anbang in talks to buy a major stake in South Korea’s Woori Bank, while the smaller has it buying Belgian insurer Fidea. Meantime, Anbang’s earlier landmark Waldorf deal is showing early trouble signs, with word that some US diplomats are expressing concerns about the sale over the potential for spying. Read Full Post…
