Ascott is ramping up its expansion plans with a target to double its portfolio to 160,000 units globally by 2023.
Hot on the heels of its recent signing of nine management contracts in China, Ascott has clinched contracts to manage another four properties with 1,200 units in new cities such as Malacca in Malaysia and Davao in Philippines while deepening its presence in Guangzhou in China and Cebu in Philippines.
Mr Kevin Goh, Ascotts Chief Executive Officer, said, With the global economic upswing and international travel arrivals hitting a new high, we are confident of exceeding 80,000 units this year. We see immense potential to scale up to 160,000 units worldwide in the next five years. Besides accelerating our growth through management contracts, which currently make up 60% of our portfolio, we will continue to seek opportunities for strategic investments in strong operating businesses that will widen our customer reach and give us a competitive edge. We will also grow our franchise business, particularly through our Citadines and Quest brands, and form strategic alliances with leading companies that have a pipeline of properties for us to manage.
We will focus on key gateway cities in our two biggest markets, China and Southeast Asia, as well as markets such as Australia, Europe, Japan, South Korea and the U.S. Expanding our global network will allow us to leverage greater economies of scale and strengthen our earnings. To position Ascott for the future, we will harness digital innovation and technology to enhance customer experience. For instance, our co-living brand, lyf, targeted at the millennials will provide guests with a complete digital experience, Mr Goh added.
With its latest deals, Ascott has entered new destinations Malacca and Davao. Its Somerset property in Malacca, Ascotts largest property to date, will benefit from an upcoming free economic zone and sea port. Meanwhile, its foray into Davao will anchor Ascott in Philippines third fastest-growing economy which also serves as the economic and tourism hub of Southern Philippines. Ascotts fifth property under its lyf brand will be in Cebu, the top investment destination in Philippines outside Metro Manila. With Ascott also increasing its presence in Guangzhou, it has reinforced its leading position as one of the largest serviced residence operators in China.
Mr Goh said, The Chinese are our top customers at our properties globally and continue to be the fastest growing segment in 2017, growing at 33% year-on-year. Besides opening more properties in China, we have stepped up our online marketing efforts tailored for the China market to better capture the Chinese travellers demand for properties both in and outside of China. For instance, Ascott has one of the largest serviced apartment listings on Fliggy, which has more than 200 million users. Our properties on Fliggy cover over 50 cities most popular amongst Chinese travellers, such as Singapore, Bangkok, Tokyo, Paris and London.
With these new additions, Ascott currently has more than 160 properties with about 30,000 units under development worldwide. About 35 of these properties with more than 6,500 units are scheduled to open this year, half of which are in China, and a quarter in Southeast Asia. The rest are in countries such as Australia, France, India, Saudi Arabia, and the United Kingdom, including Ascotts first property in Africa.
The new management contracts have increased Ascotts portfolio in Southeast Asia to about 23,000 units in 111 properties across 34 cities. Its newly secured properties in Guangzhou has also strengthened Ascotts foothold in China with over 20,000 units in about 110 properties across 31 cities.