Ascott creates Chinese JV to accelerate expansion through ‘manachising’

Ascott is targeting to triple its Citadines room inventory by 2025 through a joint venture with Chinese hotel operator Huazhu Hotels Group and CJIA Apartments Group (CJIA), Huazhu’s subsidiary and an apartment rental firm.

The Singapore-based serviced residence operator, Huazhu and CJIA will hold 50 per cent, 10 per cent and 40 per cent respective stakes in the partnership.

The joint venture will focus on growing Citadines in the first-tier Chinese cities of Shanghai, Beijing and Shenzhen for the initial years. It has secured its first property in the Pudong district of Shanghai, which will come under the Citadines brand and enjoys easy access to the city’s financial district.

Kevin Goh, Ascott’s CEO, said: “Our partnership with Huazhu and CJIA marks Ascott’s most significant and game-changing move in the asset-light ‘manachise’ (a hybrid of franchise and management contract) business to date. Huazhu is one of China’s biggest hospitality players with significant local capabilities. CJIA has scaled up rapidly in the apartment rental space with more than 90 per cent of its revenue from long-term rentals, which complements Ascott’s position in the long-stay business.”

“The ‘manachise’ business model focuses on design and product standardisation, as well as economies of scale, resulting in time and cost savings for the manachisees,” he explained.

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