Red Planet Japan steps up Asian expansion with $59.5 million acquisition [Download construction report]
Red Planet Japan announces the $59.5 million acquisition of the Thailand-based hotel arm of its parent company Red Planet Hotels Limited on the back of a series of expansion announcements in the Asia Pacific region.
Red Planet Japan has announced that it is acquiring the Thailand-based hotel arm of its parent company Red Planet Hotels Limited. Industry experts say the acquisition is likely to be completed by the end of the first quarter of the financial year 2019.
Red Planet Japan will acquire a half dozen hotel-owning companies in Thailand, all of them from its parent company. This will make for a total acquisition consideration of 6.5 billion Japanese yen or $59.5 million.
The acquisition includes five operating hotels, located in Surawong (Bangkok), Patong (Phuket), Asoke (Bangkok), Pattaya, and Hat Yai. It also includes a sixth property that is currently under development in Sukhumvit Soi 8 (Bangkok).
The operating hotels being acquired in Thailand have a recorded sales that totals 692 million Japanese yen ($6 million) in 2017 and 787 million Japanese yen ($7.1 million) in 2018.
As a result of this acquisition, Red Planet Japan’s portfolio will increase to a total of 15 hotels in Japan, Thailand, and the Philippines, including five hotels under development.
Expansion of Japanese Tourism
Japan, like many markets with easy access to Southeast Asia, has undergone a tourism boom in recent years.
Factors such as the expansion of low-cost carrier routes, the loosening of visa requirements, and a growing affinity for Japanese culture, has fueled a substantial increase in the number of tourists travelling from Southeast Asia to Japan in recent years, especially from Thailand.
In fact, Thai visitors to Japan have more than doubled over the last five years to 1.13 million in 2018.
Correspondingly, the number of Japanese visitors to Thailand continues to rise, exceeding 1.4 million visitors in 2016, 1.5 million in 2017, and 1.6 million in 2018.
Red Planet’s Future Development Plans
The acquisition of Red Planet’s Thailand hotels follows an ongoing series of expansion announcements by Red Planet Japan, including the planned opening of Red Planet Hiroshima Nagarekawa in the summer of 2020 and acquisition of two flagship properties in Manila in June 2018.
It should also be noted that the fast-growing brand opened Red Planet Sapporo Susukino South, its fifth hotel in Japan, in June 2018, and expects to open its second property in Sapporo, Red Planet Sapporo Susukino Central, in October 2019.
Simon Gerovich, Chairman of Red Planet Japan, had this to say: “Red Planet Japan is now a regional leader in the Asian budget hotel space with properties in Japan, the Philippines, and Thailand.”
“Not only does this expanded network drive revenues and profit margins due to the economies of scale, but also underlines our regional operational expertise. As witnessed by our recently-announced joint venture which enables us to invest up to 22 billion yen in six new hotels over the next two years, we have the scale to attract new growth drivers such as franchising, management contracts, and joint ventures in both existing and new markets,” he added.
Let’s take a look at a few other projects currently underway in Thailand:
The Langham, Bangkok at Chao Phraya River
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