16
Ascott Residence Trust
Annual Report 2015
Value Creation
Develop yield management and marketing
strategies to maximise RevPAU
The profitability of Ascott Reit’s portfolio depends
primarily on the maximisation of RevPAU. Therefore,
our yield management and marketing strategies are
focused on:
• assessing and adjusting apartment rental rates
based on occupancy levels and demand; and
• determining the appropriate balance between higher
yielding short-stay guests and stability of revenue
from long-stay guests.
We work closely with the SRMCs to establish and
develop relationships with global key accounts,
and leverage on the Sponsor’s global networks to
improve Ascott Reit’s revenue and profitability.
In 2015, the Sponsor invested in Tujia.com International
(Tujia), China’s largest online apartment sharing
platform, to strengthen its presence in China.
Ascott’s three internationally recognised brands of
serviced residences – Ascott, Citadines and Somerset
– have since been made available on Tujia’s online
platform, successfully expanding their reach to more
guests in China and beyond.
The Sponsor continued to strengthen its communication
efforts with key accounts and preferred partners to
boost revenue and profitability. In 2015, the Sponsor
introduced its global campaign, Ascott Lifestyle,
enabling its guests around the world to take part in
specially handpicked experiences from cultural to
gastronomical, local and wellness activities to explore
the city they are in. Through a series of marketing
initiatives across multiple platforms, the campaign
generated positive results for the SRMCs and further
strengthened the Sponsor’s brand equity.
To build a strong online community, the Sponsor
enhanced its Ascott Online Advantage programme with
attractive provisions for its members when bookings are
made directly through its brand websites. The Sponsor
continues to reach out to more customers on social
networking platforms such as Instagram, WeChat,
Twitter, YouTube, Pinterest, Flickr and Weibo. The
Facebook pages for Ascott The Residence, Citadines
Apart’hotel and Somerset Serviced Residence have
garnered over 90,000 fans to-date.
The Sponsor’s Global Distribution System (GDS) chain
code “AZ” continues to enable travel management
companies and travel agents access rates and room
availability more efficiently. Furthermore, the Sponsor
has global promotional partnerships with Citibank and
other credit card partners in the form of discounts for
cardholders. Guests who are Asia Miles members
or Singapore Airlines’ KrisFlyer members can earn
mileage for their stays at participating residences.
The Sponsor also partners with CapitaLand Malls Asia
Limited to provide CapitaCard members discounts and
privileges when they book and stay at Ascott serviced
residences.
Improve operating efficiencies and economies of
scale
To minimise direct expenses and increase gross profit
margins without compromising our quality of services,
Ascott Reit, together with the SRMCs, have identified
several areas for cost management. These include:
• direct marketing to tenants to reduce commission
expenses otherwise payable to online travel agencies;
• centralisation of key functions such as finance and
procurement for properties located within the same
city or region; and
• bulk purchases by leveraging on Ascott’s global
portfolio to achieve economies of scale.
Create real estate value and maintain quality of
portfolio
We continuously strive to enhance Ascott Reit’s assets
through planned periodic upgrading, refurbishment and
reconfiguration of the properties in order to achieve a
higher level of guest satisfaction as well as to improve
the properties’ performance and competitiveness.
The improvement in performance is expected to
translate into higher real estate value.
Unlocking values
As part of our strategy to reconstitute Ascott Reit’s
portfolio, we monitor closely and evaluate the properties
to ascertain if any of them may have reached the optimal
stage of their life cycle and should be divested so as
to unlock the value of these properties. The proceeds
from the divestment can then be redeployed for other
purposes, including investing in higher yielding assets.
