0

5,000

10,000

15,000

20,000

25,000

30,000

0100200300400500600700800

Hostels2016 Hostels2017Beds2016 Beds2017

SoutheastAsiaHostelMarketUpdate

January2018

Trends ForwardOutlook• Laosleadsregionalsupplygrowthwitha58%

increaseinbedinventoryy-o-y,followedbyCambodiaandMalaysiaat52%and43%,respectively.

• Conventionalhotelcompaniesinvestingintothehostelsector,highlightedbyLub dwhichisregion’slargest/fastestgrowinghostelgroup.

• Despiteinfluxofcapitalintobrandedhostels,independentpropertiesremainpredominantinthemarketwithsoaringy-o-ygrowthof87%.

• Currentgovernmentrulesandregulationsforopeninghostelsarenotclearlydefinedbutareincreasinglycomingunderscrutinyduetogrowthofsharedeconomyproducts(i.e.Airbnb).

• Growthofhostelsupplyinleisuredestinationsreflectinghighdemandforbudgettravelersandchangingtasteforexperientialaccommodation.

• Microaccommodationisshiftingproducts,asprivacyisbecomingindispensableforhostels,andexponentialgrowthinprivaterooms.

BillBarnett,ManagingDirector,C9Hotelworks

HostelMarketSizebyCountry

Source:C9HotelworksMarketResearch

With30%growthinbedsupplywithinayear,hotelchainsandinvestorseyehostelofferingsSegmentonwaytobecomingkeycompetitiontobudgethotelmarket“Thehostelmarketlastyearexperiencedskyrocketinggrowthof32%inbedinventory,amountingto63,632bedsin1,766propertiesacrossSoutheastAsia.Thailand,withitsprolifictourismnumbers,continuestoleadthesectorwitha41%share.Withmountingdemandinthesector,thereisnosignofdecelerationasinvestmentisbeingembracedbyanincreasingnumberofhospitalitygroupsandinstitutionalinvestors.

Inpastyears,hosteldevelopersmaximizedprofitsbydevelopingpropertieswithhighbedinventoryandnoprivaterooms.However,micro-privateroomsinhostelsarebecomingessentialandimpactfultorateyields.ThiscanbestbeseeninthegrowthofhostelswithprivateroomsinIndonesia,ThailandandVietnamwhichnowexceed50%ofoverallroominventory.

Despiteanelevatedgrowthofsupply,oneconsiderablecomplicationtothehostelmarketistheambiguousrulesandregulations;thesehavebecomeamajorconcerninleadingdestinationssuchasThailand,MalaysiaandevenJapan.Whilegovernmentregulationisstartingtoevolve,thisremainakeysectorissue.”

NumberofProperties NumberofBeds

0%

20%

40%

60%

80%

BedNightsy-o-yGrowth Bookingsy-o-yGrowth

0%10%20%30%40%50%60%70%80%90%100%

MARKETOVERVIEW

C9SEAsiaHostelMarketUpdate:January2018

Independenthostelsdominatetheregionalmarket,with1,532propertiesrepresenting87%oftotalsupply

XXX

LeadingNationalitiesBookingSoutheastAsiaHostelsOnline

Chainvs.IndependentHostels

GrowthofHostelswithPrivateRooms

2

0%

20%

40%

60%

80%

100%

Independent ChainAffiliated

PrivateRoomsvs.SharedRoomsMix

%ofGrowth

%ofProperties

%ofProperties

Source:Hostelworld

Source:C9HotelworksMarketResearch

Source:C9HotelworksMarketResearch Source:C9HotelworksMarketResearch

%ofGrowth

Data:Fullyear2016

0%10%20%30%40%50%60%70%80%90%100%

PartialPrivateRooms SharedRoomsOnly

01234567

2016 2017

AverageDailyRateperBed(ADRB)

3C9SEAsiaHostelMarketUpdate:January2018

PERFORMANCEINDICATORS

ABRacrossregionis3.9,withSingaporehavingthehighestratioat6.3

AverageBedsperRoom(ABR)RatiobyCountrySource:C9HotelworksMarketResearch

Source:C9HotelworksMarketResearch

SelectAverageBookingLeadTimesandLengthofStaybyDestination

InUSD

Days Nights

Source:Hostelworld

Year-on-yearmarket-wideADRBdeclinedasnewpropertiesrosesharply.SingaporehashighestADRBfollowedbyMyanmarandPhilippines

Data:Fullyear2016

0.0

5.0

10.0

15.0

20.0

25.0

2016 2017

00.511.522.533.54

02468101214161820

AverageLeadTime(Days) AverageLengthofStay(Nights)

C9HotelworksCompanyLimited

www.c9hotelworks.cominfo@c9hotelworks.com

TopFiveHostelMarketLeadersSoutheastAsia

ThailandNumberofhostels:722Numberofbeds:25,207Growth(y-o-y)ofbedsupply:28%

CambodiaNumberofhostels:138Numberofbeds:5,560Growth(y-o-y)ofbedsupply:52%

MalaysiaNumberofhostels:263Numberofbeds:9,113Growth(y-o-y)ofbedsupply:43%

SingaporeNumberofhostels:92Numberofbeds:5,541Growth(y-o-y)ofbedsupply:4%

VietnamNumberofhostels:221Numberofbeds:7,763Growth(y-o-y)ofbedsupply:41%

Top5HostelMarketCountriesLub d:5properties,1,035beds(Thailand-based)TheMadMonkey:8properties,980beds(Cambodia-based)5footway.inn:5properties,730beds(Singapore)VietnamBackpacker:5properties,581beds(Vietnam)InternationalInnHotelsGroup:8properties,284beds(Malaysia)

Source:C9HotelworksMarketResearch