Aug. 16 (Bloomberg) -- Banyan Tree Holdings Ltd., a Singapore-based operator of spas and resorts, is seeking to expand its presence in Europe and the Americas amid signs that the economies in these markets are recovering.
The company plans to revive projects in Spain, Greece and Mexico, which it abandoned after the 2008 global financial crisis. Banyan Tree has signed two contracts to run properties in southern Spain, and is in talks to resume a couple of projects in Greece, Chairman Ho Kwon Ping said.
“We actually see Europe and America beginning to recover,” Ho said in an interview in Singapore yesterday. “In the last five years, growth was almost 100 percent driven by China. We had virtually no inquiries coming out of the rest of the world. But now, in the last six to nine months, we have seen a lot more interest in the Middle East, in the Americas.”
Banyan Tree is betting on a recovery as the euro area’s economy emerged from a record-long recession in the second quarter with a 0.3 percent expansion in gross domestic product. In the U.S., retail sales rose in July for a fourth consecutive month, showing American households are regaining momentum as employment climbs.
Southern Europe has become an attractive tourist destination for Europeans after the Arab Spring forced them to abandon holidays in Morocco, Tunisia and Egypt and flock to Spain, Canary Islands and Greece, Ho said.
The Arab Spring refers to the democratic uprisings that arose independently and spread across the Arab world in 2011. In Egypt, security forces broke up sit-ins by Islamist protesters this week, sparking violence that left hundreds dead.
Banyan Tree said Aug. 13 its second-quarter profit more than doubled to S$1.7 million ($1.3 million), while revenue climbed 3 percent to S$81.7 million.
“Their strategy has always been to head to new locations,” said Derek Tan, a Singapore-based analyst at DBS Vickers Research. “It’s exciting but unchartered territory for them, but I would prefer they go in very cautiously. They should do management contracts rather than putting in equity or it would stretch their capital needs.”
The stock rose 0.7 percent to 70 Singapore cents at the close of trading today. The stock has gained 24 percent in the past year, compared with the 17 percent gain in the Bloomberg REIT Hotels Index. The Singapore benchmark Straits Times Index has risen 4.4 percent.
Banyan Tree is a manager and developer of resorts, hotels and spas mainly in the Asia Pacific, with 36 resorts and hotels, 73 spas, and three golf courses. Locations include Thailand’s Koh Samui, Seychelles and Cabo Marqués in Mexico.
The resort operator will open a Banyan Tree property in Morocco next year, two more in China and one in Kerala in Southern India. It will open another nine properties in China in 2015, a country where locations include Lijiang and Hangzhou, a resort built as a water village inside a wetland reserve. A night in a villa with a water view costs 3,500 yuan ($572).
“While we continue to want to grow a lot in China we are beginning to refocus back into Europe and the Americas,” Ho said. “Interest is reviving again. People are dusting off old projects, financing is becoming more available.”
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