Ascott unveils new target to double fee revenue to overs $500 million in next five years

Saturday, April 29, 2023

The Ascott Limited (Ascott) has achieved its target to secure 160,000 units by 2023, with the signing of over 4,000units in 1Q this year. Sharpening its focus on quality growth, Ascottis renewing its target todouble fee revenue to more than $500 million in the next five years. The fee revenue target is set off the FY2022 base of S$258 million – the highestearnings on record forAscott. Fee revenue from the lodging business increased by 36% year-on-year (y-o-y) in FY 2022 on the back of record signings and property openings. This demonstratesAscott’sstrength as a key contributor of fee-related earnings to CLI’s overall business.

Ascott also achieved a record net room growth of 20% in FY 2022, underpinned byits acquisition of Oakwood which added about 15,000 units to its portfolio, of which approximately 8,000 are operational units that contributedtoits fee revenue. In the last five years, Ascott has rapidlygrown its operational units from more than 56,000 units in 2018 to over 95,000 units in 2022. This year, it expects to open more than 13,500 units in over 70 properties. Ascott will continue to expand its product offerings spanning a portfolio of serviced residence, hotel, coliving and senior living brands, positioned from mid to luxury scale. Fee revenue growth will be driven by new property openings as well as new signings at an expected annual net room growthrate of 8-10% in the next five years.

Mr Kevin Goh, Chief Executive Officer for Ascott and CLI Lodging, said: “With our asset-light strategy, Ascott has doubled in units every five years, growing from about20,000 units in 2008 to over 160,000 units today.We are now seeing the positive financial impactofgrowing our portfolio by eight-fold and will focus on driving even stronger fee growth over the next five years.Over80% of our total units are under management and franchise contracts, up from 43% tenyears ago. These management and franchise contracts typically have sticky recurring fee revenueand long tenures.”

Ascott also demonstrated strong operating performance in FY 2022,with a 40% y-o-y increase in revenue per available unit (REVPAU) with the recoveryof international travel. Ascott is riding on this momentum to further optimise the performance of its operational portfolio.

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