Acquisitions of Citadines and Oakwood Propel Ascott to Top Three Global Extended Stay Providers
Ascott Limited has secured a position among the top three global extended stay providers through Citadines and Oakwood strategic acquisitions. These acquisitions, completed in 2022 and 2023, have significantly expanded Ascott’s portfolio, enhancing its market presence and service offerings.
Ascott Limited is a global company specializing in serviced apartments and hotel services. It is a leading international lodging owner-operator with a portfolio that includes serviced residences, coliving spaces, and hotels. The company operates under various brands, catering to different market segments and customer needs.
Expanding the Global Footprint
Ascott Limited, a Singapore-based real estate and lodging company, has been a significant player in the hospitality industry since its inception in 1984. Originally a subsidiary of CapitaLand, Ascott has grown exponentially, now boasting a presence in over 220 cities across more than 40 countries. The acquisitions of Citadines and Oakwood have added substantial weight to Ascott’s already impressive portfolio.
“The integration of Citadines and Oakwood into our portfolio marks a significant milestone in our growth strategy. These acquisitions not only expand our global footprint but also enhance our ability to offer diverse and flexible accommodation options to our guests,” remarked Annie Sng, Ascott’s spokesperson.
Citadines, a European serviced residence chain, was acquired by Ascott in a two-phase deal starting in 2003. Initially, Ascott purchased a 50% stake for EUR 84.2 million, followed by a full acquisition for EUR 74.3 million in 2004. This move increased Ascott’s portfolio to 13,500 serviced units across 37 cities in 16 countries. The Citadines brand has since become a cornerstone of Ascott’s offerings, providing high-quality serviced apartments that cater to both business and leisure travelers.
In 2022, Ascott acquired Oakwood, a renowned brand in corporate housing, from Mapletree Investments. This acquisition added approximately 15,000 units across 81 properties to Ascott’s portfolio. Oakwood’s strong presence in North America and Asia, particularly in key markets like the United States and Japan, has been instrumental in Ascott’s expansion strategy. The Oakwood brand has seen remarkable growth, with over 20 new signings and a 20% increase in units since the acquisition.
Strategic Growth and Industry Leadership
Ascott’s aggressive expansion strategy is more than just about increasing the number of properties under its management. The company is focused on enhancing its service offerings and leveraging its expanded portfolio to drive revenue growth. Ascott’s asset-light model, which emphasizes management contracts and franchising, has enabled rapid and scalable expansion without heavy capital investment.
“Our asset-light model allows us to scale quickly and efficiently. By focusing on management contracts and franchising, we can expand our footprint and enhance our service offerings without the burden of significant capital expenditure,” emphasized Annie Sng.
One of the key differentiators for Ascott is its commitment to providing a superior guest experience. The company has introduced several initiatives to enhance the quality of its accommodations and services. The Ascott Star Rewards (ASR) loyalty program, for instance, offers exclusive benefits and flexible points usage, making it a favorite among frequent travelers.
Additionally, Ascott’s Brand360 program focuses on delivering personalized and memorable experiences to guests. This initiative includes the development of new brands and the enhancement of existing ones to cater to the evolving needs of travelers.
New Property Launches and Stay Packages
Ascott has been launching new properties and promoting attractive stay packages to attract diverse guests. Recent property launches include Citadines Arpora Nagoa in Goa, India, and Somerset Asia Afrika in Bandung, Indonesia. These new additions highlight Ascott’s commitment to expanding its presence in key markets.
The company also offers a variety of stay packages tailored to different guest needs, such as family vacations, business travel, and long-term stays. These packages often include unique amenities and services, such as complimentary breakfast, airport transfers, and access to exclusive events.
Ascott is at the forefront of digital innovation in the hospitality industry. The company has implemented several tech-driven initiatives to enhance the guest experience. The Discover ASR mobile app, for example, allows guests to manage their bookings, access exclusive offers, and enjoy a seamless check-in process.
Unparalleled Experiences & Setting New Standards
Moreover, Ascott’s AI-powered chatbot, Cubby, has revolutionized customer support by providing 24/7 assistance with travel planning, accommodation recommendations, and room bookings. This innovative approach has significantly improved guest satisfaction and engagement.
Ascott’s commitment to sustainability is evident in its green initiatives across its properties. The company has implemented energy-efficient building designs and waste-reduction programs. It aims to have all its properties certified by the Global Sustainable Tourism Council (GSTC) by 2028.
An anonymous industry expert noted, “Ascott’s rapid expansion is impressive, but it also comes with risks. The company needs to ensure that it can maintain the quality of its services and manage its properties effectively as it continues to grow.”
Despite these challenges, Ascott remains confident in its ability to navigate the complexities of the global hospitality market. The company’s strong financial performance and strategic acquisitions position it well for continued success.
Ascott’s financial performance has been robust, with significant contributions from its newly acquired properties. The company reported a 16% increase in Distribution per Stapled Security (DPS) in 2023, driven by strong operating performance and higher contributions from its fee-based business. The Oakwood portfolio, in particular, has been a major contributor to Ascott’s recurring fee income, aligning with the company’s goal to double its fee revenue to over S$500 million by 2028.
The Ascott Limited celebrates its 40th anniversary this year, marking a significant milestone in its journey. The acquisitions of Citadines and Oakwood have expanded Ascott’s portfolio and strengthened its position as a leading provider of serviced residences and corporate housing. With a focus on strategic growth, sustainability, and innovation, Ascott is poised to shape the future of the hospitality industry.
“Our journey over the past 40 years has been remarkable, and we are excited about the future. With our expanded portfolio and commitment to excellence, we are ready to take on new challenges and continue our growth trajectory,” concluded Annie Sng.
Ascott’s strategic acquisitions and innovative approach to hospitality will undoubtedly keep it at the forefront of the industry, providing guests with unparalleled experiences and setting new standards for excellence in the extended stay market.
