The renowned swiss luxury hotel

The Chedi Andermatt will be the first addition of independent hotels to Global Hotel Alliance's loyalty program "GHA DISCOVERY", which already covers 800 hotels with

21m guests and $ 2bn revenue annualy

.

Following ASW's aquisition of a 10% stake in GHA (May 2022), the two companies created a soft brand called "ASMALLWORLD DISCOVERY" with the intention to bring independet hotels to the GHA DISCOVERY loyalty program. ASW will be exclusively providing access for independent hotels to the GHA DISCOVERY program, which

 was only accessible for multi-property hotel brands before (see scheme on p.2). So far 40 hotel brands with more than 800 hotels worldwide share GHA DISCOVERY as their loyalty platform.

This milestone underpins that ASW's new venture as a service provider for independet hotels starts to materialize. This signing should help ASW onboard additional hotels during the coming months. Furthermore, we expect great potential for ASW as this partnership is win-win situation for borth parties:

Independet hotels can broaden their customer base

and add GHA DISCOVERY as a new low-cost distribution channel while decreasing dependencies from online brokers (e.g. booking.com) and hence improve margins. In addition, independent hotels can improve customer stickiness via 

GHA DISCOVERY's highly valuable loyalty benefits.

In return ASW receives a comission from each independent hotel booking coming via ASW as well as a service fee from GHA. Cross selling opportunities can also be expected from GHA DISCOVERY's 500k elite tier members who receive a complementary ASW social network membership and access to ASW's other services (e.g. ASW Collection, First Class & More, etc.) So far, rougly 4-5k signed up to ASW. For FY 2023 we expect additional 10k members, which would increase the total member base to 75k.

ASMALLWORLD DISCOVERY is expected to go live towards the end of Q1.

 Though meaning little in numbers so far, after initial set-up costs we estimate recurring service fees to drive profitability in 23e, should ASW scale this new venture as planned. (eNuW FY'23 Sales: CHF 23.1m; EBITDA margin: 16%)

We reiterate our BUY rating with unchanged PT of CHF 7.40, based on DCF.