Destination Capital plots acquisition spree in Thailand and APAC

Construction News
Destination Capital CEO James Kaplan

Destination Capital plots acquisition spree in Thailand and APAC

Bangkok-based real estate advisory firm Destination Capital will join forces with its capital partners to acquire, manage and rebrand hotel assets in Thailand and across Asia-Pacific in a bid to revitalise the hospitality sector.

Destination Capital (DC) was recently formed as an investment fund to partner with private equity and institutional funds to source hotel acquisition opportunities and asset manage in the Asia-Pacific region, with an emphasis on Thailand. The company is part of Asia’s leading hospitality operator, Destination Group, which has a 24-year track record in Thailand of buying, repositioning, asset managing and selling hotels.

Destination Capital CEO James Kaplan said in a statement that the company will source assets that will reap higher returns after renovation and repositioning, with a focus on prime-located freehold hotels and resorts of approximately 200 rooms located in key urban and resort locations.

The company plans to acquire a portfolio of 12-15 four-star hotels over the next 18 months, with capital values ranging up to 1.5 billion baht (US$47.1 million).

Kaplan will leverage his global hospitality experience alongside the resources of Destination Group and its capital partners to attract domestic and international private equity, with a focus on acquiring, repositioning, and managing hotel assets in Thailand and elsewhere in Asia.

Thailand welcomed almost 40 million international tourists last year. However, recent estimates indicate 2020 international arrivals may plummet to as low as eight million, of which seven million have already arrived prior to the Covid-19 lockdown. The aviation and tourism industries have been disproportionately impacted, particularly in Thailand, where tourism accounts for almost 18 per cent of GDP.

Millions of people are unemployed, and thousands of hotel rooms are now shuttered, prompting the immediate need for fresh capital injections for hotels to re-employ and re-open as well as sustain operations during the projected prolonged recovery cycle.

Although the hospitality industry will be slow to recover as a result of the current situation, historically, Thailand has successfully rebounded from past crises, emerging more robust and more resilient.

“We believe a similar rebound story will be true with a full recovery in three to four years. We will deploy our resources to source and acquire hotels which present a turnaround story during this period of rebound,” said Kaplan who alongside his hospitality and real estate teams have a proven track record of asset acquisition and management of hotel turnarounds over the past several decades.

Kaplan added that the resilience of the Thai economy and tourism industry is a key factor to revive hotel and hospitality industry in the medium-term in line with company’s investment strategy.