Ascott is targeting to triple its Citadines room inventory by 2025 through a joint venture with Chinese hotel operator Huazhu Hotels Group and CJIA Apartments Group (CJIA), Huazhuâ€™s subsidiary and an apartment rental firm.
The Singapore-based serviced residence operator, Huazhu and CJIA will hold 50 per cent, 10 per cent and 40 per cent respective stakes in the partnership.
The joint venture will focus on growing Citadines in the first-tier Chinese cities of Shanghai, Beijing and Shenzhen for the initial years. It has secured its first property in the Pudong district of Shanghai, which will come under the Citadines brand and enjoys easy access to the cityâ€™s financial district.
Kevin Goh, Ascottâ€™s CEO, said: â€œOur partnership with Huazhu and CJIA marks Ascottâ€™s most significant and game-changing move in the asset-light ‘manachise’ (a hybrid of franchise and management contract) business to date. Huazhu is one of Chinaâ€™s biggest hospitality players with significant local capabilities. CJIA has scaled up rapidly in the apartment rental space with more than 90 per cent of its revenue from long-term rentals, which complements Ascottâ€™s position in the long-stay business.”
“The ‘manachise’ business model focuses on design and product standardisation, as well as economies of scale, resulting in time and cost savings for the manachisees,” he explained.
Goh shared that China remains Ascott’s top source market globally with the Chinese constituting almost a quarter of customers and continuing to be the fastest-growing segment.
Besides ‘manachise’, Ascott will continue to expand through investments, strategic alliances, management contracts, leases and franchises.
The joint venture with Huazhu and CJIA comes on the heels of Ascottâ€™s recent partnership with specialty township developer Riverside Group to launch serviced residences in Zhejiang, Chongqing and future riverside themed towns in other key Chinese cities.
Ascott is also in partnerships with new economy leaders such as Tujia, Chinaâ€™s largest online apartment sharing platform, and Alibabaâ€™s online travel service platform Fliggy.
Ascott has more than 110 properties with over 20,000 units across more than 30 cities in China. Of these, 30 are Citadines-branded properties with close to 5,000 units in 19 cities.