Owning luxury hotels is tough; long term rewards await patient capital

Jardine Matheson and Frasers Property could gain from hotel ownership over the long term

The prestige associated with owning luxury hotels can appeal to the vanity of the super rich. However, hotel ownership is hardly for the faint-hearted.

Revenue may be volatile. When a pandemic, natural disaster or major terrorism incident strikes, room and event bookings can quickly vanish.

On the other side of the ledger, operating costs could be high, especially for hotels that are intent on pampering their guests. With the tight labour market, attracting and retaining talent is often challenging in Singapore’s hospitality sector.

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