This has been the strategy of choice for hospitality behemoths like Marriott International — the subject of City & Country’s cover story in Issue 1232 dated March 23. Nasdaq-listed Marriott became the world’s largest hotel group in 2016 after acquiring competitor Starwood Hotels & Resorts Worldwide. Within the region of Asia Pacific excluding China, Marriott now operates more than 730 properties across 27 brands in 22 countries, with 400 more in the development pipeline.
Global hotel chains are expanding through management and franchise contracts, a model now spreading to regional operators looking to boost fee income while limiting capital exposure. Can Far East Hospitality do the same?
The “asset-light” strategy adopted by local corporate giants like CapitaLand and Keppel is not new; the hospitality industry has embraced it for some time. The model — which favours management and franchise contracts over full ownership of physical hotels and hospitality properties — allows global chains to scale, adding impressive room counts (and even entire franchises) to their portfolio in a matter of quarters.
