Ascott targets to double fee revenue to over $500 mil in next five years

Ascott Limited, the lodging business unit of CapitaLand Investment (CLI), is targeting to double its fee revenue to over $500 million in the next five years. This is off the back of its FY2022 base of $258 million – the highest earning on record so far. FY2022 saw an impressive 36% y-o-y growth, mainly due to record signings and property openings. Additionally, the business has also achieved its target of securing 160,000 units by 2023.

To further strengthen its product offerings and fee revenue, Ascott will be running its mid to luxury scaled serviced residence, hotel, co-living and senior living brands. A 8%-10% annual net room growth rate over the next five years is expected to bolster fee revenues. Kevin Goh, the CEO of both Ascott and CLI Lodging, is optimistic about the prospects of the business.

“With our asset-light strategy, Ascott has doubled in units every five years, growing from about 20,000 units in 2008 to over 160,000 units today,” says Goh. “We are now seeing the positive financial impact of growing our portfolio by eightfold and will focus on driving even stronger fee growth over the next five years.”

At the moment, more than 80% of the company’s total units are under management and franchise contracts, an increase compared to the 43% ten years ago. These management and franchise contracts usually generate recurrent fees and they tend to go on for long tenures. Goh has indicated that there are plans to secure more management and franchise contracts for prime properties with higher quality fees. Leveraging off the company’s strong brand equity and direct distribution channels are two other strategies to bring more value to property owners and customers.

Ascott has come a long way since its inception in the 1980s. Its exemplary record in managing its portfolio of properties cements its position as a leader in the global lodging industry. With its sights set on new heights, the business is set to bring better experiences to guests from across the world.