(Mar 13): Homegrown integrated lifestyle group Amara Holdings engages in three main businesses — Hotel Investment and Management, Property Investment and Development, and Speciality Restaurants and Food Services.
What are Amara’s key competitive strengths or differentiating factors from other integrated lifestyle players?
We have our beginnings in the building, construction and property development business in the 1970s. We have since grown into a sizeable integrated lifestyle group with quality assets — from business, resort and luxury hotels under our Hotel Investment and Management segment, to retail, commercial and residential developments under the Property Investment and Development segment, as well as award-winning restaurant brands under our Speciality Restaurants and Food Services arm.
We embrace innovation and are focused on providing differentiated experiences across our business segments, ensuring our brands offer strong value propositions. We believe that our commitment to continually rejuvenate and refresh our assets and service offerings will put us ahead of the competition.
Please share with us more about Amara’s three growth pillars and business segments.
For our three lifestyle businesses, we have adopted a clear branding differentiation within each segment to reflect the respective assets’ unique personality and to pave the road for sustainable growth.
Hotel Investment and Management aims to replicate Amara’s reputable homegrown brand and quality services in key vibrant cities around Asia, tapping on the growth potential the region offers. In 2018, we opened our maiden hotel in Shanghai under the new luxury brand, Amara Signature.
Property Investment and Development (Commercial) aims to inject new shopping experiences to meet the changing demands of consumers and we strategically rejuvenate our tenant mix from time to time. In 2018, we successfully revitalised our tenant mix at 100 AM, welcoming two popular Japanese brands — Daiso and Don Don Donki — which together with our F&B anchor tenant, itadakimasu by Parco, brought a wide variety of new-to-market F&B concepts to the mall.
As for the Property Investment and Development (Residential) division, we created Singapore’s first luxury hotel-inspired executive condominium CityLife @ Tampines as a joint development with Kay Lim Holdings and SingHaiyi Group. This in line with our strong emphasis on developing products with a difference.
Lastly, Speciality Restaurants and Food Services is a strong complementary pillar of our hotel brand names. We recently unveiled a new modern interior for Thanying Singapore.
The group is active in Shanghai and Bangkok. What drove its expansion into these markets? Are there plans to venture into other regions?
Since the expansion of our hotel segment in both Shanghai and Bangkok, we have extended it to our mixed-use development — 100 AM — as well as Speciality Food Services division. In 2Q2019, with the opening of 100 AM Shanghai at Changshou Road in Putuo District, we brought Thanying Restaurant to the shores of China, which is our first overseas.
We are also exploring opportunities to extend our footprint to new overseas markets including Japan, Australia as well as in Asean and key cities in Europe, to diversify our revenue streams.While looking for expansion opportunities, another core focus for us is to perfect our business processes and export our in-house hotel management expertise to all our overseas assets. This allows us to cement the critical fundamentals in our hotel management business while building brand recognition overseas.
Could you elaborate on the tourism landscape in Bangkok and China, and how Amara remains competitive in these overseas markets?
Bangkok has emerged as the Top Destination city for the fourth straight year and sees about 22.8 million international overnight visitors in 2018, according to Mastercard. China is also set to overtake France to be the world’s most popular tourist destination by 2030, reported Euromonitor International. With Shanghai being one of the most popular destinations for domestic travellers, Amara Signature Shanghai is well set to capitalise on this tourism flow in the long term.
We have exported our well-loved speciality restaurants — Element and Thanying — to our hotels overseas, expanding our offerings by bringing unique dining experiences to all our guests.
We also plan to bring our new mobile check-in application, launched at Amara Singapore, to enhance our guest offerings. The app allows for faster and hassle-free check-in and ability to control room features via mobile devices, as we continue to leverage on the Smart Living concept and embrace our technological capabilities to improve service deliveries and guest experience.
Over the past few years, tourist arrivals and total spending in Singapore have increased. How have your local hotels and speciality restaurants leveraged on this growth?
Amara is always seeking to refresh our existing assets to meet the demands of our well-travelled guests. Recent projects include the transformation of guest rooms to incorporate a smart living concept at Amara Singapore and refurbishing of Thanying Singapore.
The adoption of technology and innovation will continue to be our key priorities in future, to improve productivity and to enhance guests’ experience. With the implementation of a mobile app at Amara Singapore, guests can also use the application to control features in the newly revamped guestrooms such as air-con temperature, control lighting and more. We have also embraced technology to enhance guest experience at Amara Sanctuary Resort, Sentosa.
What is Amara’s strategy to tap on the government’s plans for a rejuvenated city centre?
100 AM, a mixed-use development, aims to create a vibrant atmosphere beyond office hours. This includes a refreshing shopping experience featuring a wide variety of retail, lifestyle and F&B concepts tailored to meet the changing demands and lifestyle requirements in the new lively and dynamic hub of Tanjong Pagar. A diverse selection of eateries and restaurants provide a hub for the office crowd, tourists and residents living, playing and working in the city centre.
Recent reports have pointed to top-tier residential properties seeing better sales this year. How is Amara differentiating its properties to ride this uptrend?
We will continue to leverage on our expertise in creating an integrated lifestyle experience to differentiate our properties for discerning buyers. Our latest luxurious 56-unit development off Newton Road, 10 Evelyn, is an elegant lifestyle project that integrates aesthetics and functionality, with utilitarian common spaces conducive for encouraging a cosy community atmosphere.
Please comment on Amara’s revenue mix/profitability over the past few years.
Between FY2016 and FY2019, our group’s revenue grew from $81.3 million to $105.3 million, representing a CAGR of 9% over four years. We also achieved a net profit of $28.2 million in the latest financial year, with a net profit margin of 26.8%. Most of the group’s revenue is from our core Hotel Investment & Management segment, which made up around 77.7% of revenue in FY2019, while Property Investment & Development constituted around 21.0% and Speciality Restaurants & Food Services made up approximately 1.3%. Notably, our regional expansion with the opening of Amara Bangkok in 2015 and Amara Signature Shanghai in 2018 have seen higher overseas contributions since FY2016.
Looking ahead, what are some challenges in the hospitality and F&B sector that you anticipate and how is Amara preparing itself for these challenges?
The hospitality and F&B industry continue to face challenges such as labour shortage and rising operational costs which we hope to mitigate by increasing efficiency and productivity through training, talent development and job redesign. In addition, we will embrace technologies and further improve our productivity and service delivery. Most recently, the outbreak of Covid-19 is expected to have an adverse impact on regional travel, business and consumer confidence. However, we remain confident of the potential of Asia Pacific’s tourism industry and Amara’s ability to export our hotel management expertise within the region. Meanwhile, we will use the opportunity to upskill our employees, while implementing stricter financial discipline.
What is Amara’s value proposition to its shareholders and potential investors?
Alongside our established track record, we believe strong fundamentals and good growth potential, Amara offers shareholders access to our quality asset portfolio. The good balance of our three complementary businesses will stand us in good stead under macro volatile conditions. With our strong branding, good asset balance and regional presence, our strategy has enabled us to hedge against the cyclical nature of this industry. In order to overcome future challenges, Amara strives towards improving productivity and value creation for customers and to be sustainable in the long run.
Candace Li a research analyst with SGX
