What chain reaction will Sunac bring when it terminates the management agreement with Wanda 2 1 Hotel?

Recently, Wanda Hotel Development Co., Ltd. announced that Sunac China Holdings Co., Ltd. will terminate the management agreement of 2 1 hotel signed with Wanda Hotel Development Co., Ltd., and Sunac China gave the reason that it decided to terminate the management agreement of 2 1 hotel due to the COVID-19 epidemic and the adjustment of the development speed of the company's own business strategy. These 2 1 hotels are located in Nanchang, Qingdao, Guangzhou, Chongqing, Chengdu, Guilin and other places, of which 19 hotels are currently operating normally, and the other two hotels are still under construction. At present, the two parties are discussing the operation management and compensation after the termination of the contract. The termination of the cooperation between the two parties will have some subsequent impacts on Sunac's business strategy in China and the operation of Wanda Hotel.

The two parties signed a hotel management agreement in 20 17, and Sunac handed over the 2 1 hotels to Wanda Hotel Development Co., Ltd. for management. The term of the agreement is 20 years, and the original expiration date of the agreement is 2037. Sunac unilaterally terminated the agreement, and Wanda Hotel Development Co., Ltd. entered the management of these 2/kloc-0 hotels for only 4 years. As for the management and operation of these 2/kloc-0 hotels after the termination of the agreement, both parties need to negotiate and reach an understanding on compensation and other issues.

The total number of hotels managed by Wanda Hotel Development Co., Ltd. is 92, and 2 1 hotels cancelled by Sunac account for one-fifth of the hotels managed by Wanda Hotel Development Co., Ltd., which can be said to have a certain impact on the long-term development strategy of Wanda Hotel Development Co., Ltd.

And Sunac China reached a standstill agreement in advance, which also shows that Sunac China's business development strategy has changed to some extent. With the domestic real estate industry ushered in industry rectification, domestic real estate enterprises that started with real estate development are adjusting their business strategies, hoping to change the current business dilemma through real estate+strategy.