Lotte Group is eyeing hotels in Shanghai and Singapore as the start of mergers and acquisitions aimed at creating a major multinational hotel chain, industry sources said Tuesday.
The hunt for buyable overseas hotels comes from Lotte Group chairman Shin Dong-bin’s idea of turning his hotel chain into a global name like the Hilton or the Hyatt with systematic operational know-how.
The conglomerate’s international office in charge of M&As and an in-house think tank Lotte Economic Research Institute are working with a Korean investment bank as advisors in the search for offerings in China and Singapore.
The only first-rate hotel Lotte now runs abroad is on Moscow’s New Arbat Avenue. The six-star Lotte Hotel Moscow opened last year after three years of construction.
Lotte’s plan is to start from M&As in China and Southeast Asia, where Korean brands have sizeable power, and expand the chain to other regions in the long-term.
Lotte Group’s spokesman Lee Byung-hee denied any plans to acquire hotels in China or Singapore, but acknowledged that overseas expansion was the conglomerate’s key path to achieve its sales target.
“We do not have any plans to acquire hotels in China or Singapore,” Lee said.
“But to meet our sales target of 200 trillion won by 2018, we would have to expand our overseas business, and that is why we are branching out our retail business abroad.”
Chairman Shin has announced that the conglomerate aims to more than triple its sales from last year’s 61 trillion won, and that 30 percent of its sales will come from overseas.
Lotte Hotel Co., which posted sales of 361.7 billion won last year, targets 1.7 trillion won in 2018. The nation’s largest hotel chain expects this year’s sales to reach 392.3 billion won.
Lotte dropped out of its bid to acquire courier giant Korea Express Co. in June.
“Despite Korea’s growth in international standing, the country still lacks a global hotel brand,” another Lotte official said.
“The chairman appears to be planning something like America’s Hilton and Japan’s Nikko.”
By Kim So-hyun (email@example.com