Highlights of this issue
Since the beginning of this year, the hotel asset auction market has been quite active. Especially recently, more and more wine management companies have begun to join the sequence of selling their shares.
On May 31, Hunan Nanhua Hotel's 100% equity and land use rights and other assets (excluding corporate debts) will be auctioned at a starting price of 413 million yuan.
On May 30, 100% of the equity of Inner Mongolia Queqiao Hotel Management Co., Ltd. was listed for transfer, and the reserve price for the transfer was 76.0488 million yuan.
On May 20, Hainan Tianli Resort Hotel Co., Ltd. was listed to transfer 75% of the equity and related debts at a transfer reserve price of about 829 million yuan.
Equity transfer is only one of the exit paths for hotel assets, which is a normal market behavior. In addition, compared with the annual sale of hotel assets in the United States, which exceeds 100 billion yuan, the overall domestic hotel transaction amount is about 10 billion to 15 billion yuan, and the liquidity is low.
However, even so, there are still many hotels in the dilemma of not selling.
When there are more and more sellers, but the number of receivers is still limited, the entire hotel industry asset trading field needs to break the situation.
01
Is it hard to do a hotel business?
In recent years, the domestic hotel market has entered the "stock era", and the number of hotels has surged to increase the competition between hotels.
Research shows that hotels have the highest contribution to average room rate growth based on 63% occupancy. If it is below 63%, the average home rate growth will contribute only 48% to the benefits of revenue per available room.
According to a report released by the Milestone Research Institute, the average occupancy rate of star-rated hotels in China will be 51% in 2023.
In this regard, Zhao Huanyan, a senior economist in the tourism and hotel industry, once pointed out that the annual average occupancy rate of domestic star-rated hotels has not reached 63%, which is the reason for the unsatisfactory performance of China's hotel industry in the case of oversupply.
He believes that the oversupply and misalignment of hotel demand are one of the reasons why it is difficult to sell hotel assets.
"Wine Management Finance" noticed that most of the above-mentioned hotels moved towards equity transfer due to operating pressure.
Let's talk about Hainan Tianli Resort Hotel first. The transferor is Yunnan Kangqi Enterprise Management Co., Ltd., a subsidiary of Kanglu Group, which holds 75% of the equity of Hainan Tianli Resort Hotel Co., Ltd., and the Haikou Marriott Hotel, which opened in 2014, is an asset under the name of Hainan Tianli Resort Hotel Co., Ltd.
It is worth mentioning that Kanglu Group has nearly 1.2 billion yuan of creditor's rights against the target company, and it is about to expire, but the reserve price of this transfer is less than 7% of the amount of the creditor's rights, which can be called a big sale.
According to its announcement, Hainan Tianli Resort Hotel Co., Ltd. will have a revenue of about 106 million yuan in 2023 and a loss of 65.95 million yuan. The asset assessment is: total assets of 1.131 billion yuan, total liabilities of 1.634 billion yuan, net assets of -503 million yuan, has been seriously insolvent. The corresponding appraisal value of the equity of the transfer target has been cleared, and the corresponding appraisal value of the creditor's rights is 830 million yuan.
According to the data, the Inner Mongolia Queqiao Hotel operated by Inner Mongolia Queqiao Hotel Management Co., Ltd. is located in Hohhot, Inner Mongolia Autonomous Region, positioned as a comfortable hotel, opened in 2014, and was listed for auction many times from 2022 to 2023 due to operational difficulties, but all of them were unsold due to unmanned auctions.
The experience of Hunan Nanhua Hotel is even more embarrassing.
Hunan Nanhua Hotel Co., Ltd. is the first high-star hotel in Yongzhou in the 90s of the last century, and has accumulated a profound corporate culture and popular influence in Yongzhou and even Hunan. The hotel is a luxury hotel wholly owned and managed by Hong Kong Huilian Investment Co., Ltd.
It is reported that the main reason for the bankruptcy of Hunan Nanhua Hotel is that its investors used Changfeng Real Estate and Nanhua Hotel as collateral to invest in Iran, and the final result was not ideal, resulting in the bankruptcy of Nanhua Hotel.
Through combing, it is found that the reason for the sale and transfer of the above-mentioned hotel equity is mainly to recover funds, revitalize assets, and reduce the burden on enterprises.
It is not difficult to see that most of the hotels held by the above-mentioned wine management companies are hotels that have been in operation for ten years or even more than ten years.
Trapped by the aging of products, lagging marketing or capital investment constraints, resulting in the current living space is compressed, development is difficult, and it is difficult to avoid the fate of equity transfer or auction.
"Wine Management Finance" found that in 2022 alone, there will be at least 6 wine management companies with 100% equity transfer, namely Poyang Ruifeng Hotel Co., Ltd., Ningbo New Century Grand Hotel Co., Ltd., Guilin Kaiwei International Hotel Co., Ltd., Shanghai Jiayi Hotel Management Co., Ltd., and Shuozhou Haiyuan Hotel Co., Ltd.
In 2023, the action of selling shares by wine management companies is still continuing.
In January 2023, Greenland Holdings plans to transfer 52% of the equity of the hotel management company to Mingyu Business Travel for a consideration of 624 million yuan.
In August 2023, Beijing Capital Tourism Group Co., Ltd. will transfer 30% of the equity of Anlan (Beijing) Hotel Management Co., Ltd. for 2.492305 million yuan.
In September 2023, Xuzhou Cathay Pacific Hotel Co., Ltd. was listed to transfer 100% of its equity.
In November 2023, Huatian Hotel plans to transfer 11% of the equity of its holding subsidiary, Loudi Huatian Hotel Management Co., Ltd.
In December 2023, BII Development plans to publicly list and transfer all 55% of the equity of Shanghai Lishi Hotel.
In addition, due to a series of "invisible worries" such as low product strength, aging personnel, lack of soul in service, and lagging marketing management, many old hotels have not only transferred their equity at a loss on the auction platform, but have also been in a state of unsuccessful auction.
For example, in 2023, Henan Dimei Business Hotel Co., Ltd. will be listed to transfer 100% of its equity at a reserve price of 10,000 yuan.
It is reported that Henan Nandimei Business Hotel Co., Ltd., established in 2014, has developed into a well-known old hotel in Henan, but it still can't escape being transferred and auctioned as a "non-performing asset".
In the business world, there will always be disconnections.
02
The best time to make a hotel deal?
In recent years, a large number of hotels have been dumped, and some people want to sell at the same time, and some people want to buy them.
According to Cushman & Wakefield, hotels accounted for 11% of the transaction value in Shanghai's bulk transaction market in 2023, compared to only 1% in 2022.
Heading into 2024, investors' enthusiasm for hotel assets remains unabated. According to Jones Lang LaSalle, the total value of hotel transactions nationwide in the first quarter of 2024 was about 3.14 billion yuan, an increase of 41% over the same period last year.
According to Jones Lang LaSalle's estimates, the total transaction value of domestic hotels is expected to exceed 20 billion yuan in 2024, while the average transaction value of domestic hotel bulk transactions has remained at the level of 15 billion yuan in the past few years.
One might ask, is now the best time to make a hotel deal?
Speaking of this, an industry person with many years of experience in the disposal of hotel assets said that it cannot be said that it is the best time, and now it can only be said that the hotel asset transaction is more active. The frequent occurrence of hotel asset transactions is also a sign that hotel asset management has begun to mature.
Why do many hotels prefer to transfer equity in asset transactions?
According to the hotel property rights network, domestic hotel transactions mostly use equity transfer, the reason is that tax can be reduced, such as the transferor tax of asset transfer includes land tax (transfer price minus 30%-60% of the original cost), income tax (25%), urban construction tax, stamp duty, etc., the transferee tax is deed tax (3%), and equity transfer only needs the investor income tax (transfer price minus 25% of the original cost).
In the past two years, it is interesting to note that the hotel transaction market has shown a two-level differentiation trend, and it is not an exaggeration to describe it as "ice and fire".
The list of hotel assets for sale continues to grow, and the selling price remains high despite the occurrence of unsold hotel assets.
In this regard, a senior hotel investor said that at this stage, all investors who can still have such a large amount of cash are cautious players. After all, the premise of investors buying the bottom is that the hotel assets are worth acquiring, which requires investors to carefully evaluate the value of existing hotels and properties in the early stage.
In view of the ongoing tension between cautious buyers and optimistic sellers, industry insiders have deduced the following situations in the market:
1. A large number of assets are being sold, and no one is still trading.
2. The first batch to be traded must be the assets that have made reasonable price concessions.
3. Because the amount for sale is too large, the wave that can still be bought has been swept out in the first batch, and the market has entered a wave of cooling-off period, and those who can't do it can only continue to be passively held.
4. Hotel asset prices began to return to rationality on a large scale, and hotel transactions were intermittently active.
Based on this, Hezong Consultants, an internationally renowned hotel consulting agency, pointed out that in combination with the current economic and real estate situation, the valuation of domestic hotel assets is low, there are few successful cases of hotel asset transfer, and many hotel assets listed for sale are facing the dilemma of unsuccessful auctions. Investors should pay attention to market risks and asset liquidity issues, and carefully evaluate investment opportunities. After the economy recovers and the market clears, there may be new investment opportunities.
Zhao Huanyan reminded that the equity transfer of the hotel industry has become a trend, and in terms of project valuation in the current industry situation, it is still worth considering the powerful acquirer, but the premise is that the overall situation of the target needs to be comprehensively judged.
Behind the frequent buying and selling of assets, it often indicates that an industry is entering a period of change.
In the future of hotel investment, we have reason to believe that there will be investors who have always adhered to the "long-termism", but in the face of new market changes, in addition to choosing to temporarily "break up", we may need to be more reborn and innovative.
Co-ordinator丨Lao Dian Editor丨As
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