[vc_row][vc_column][vc_column_text]Warning: Brisbane is about to become interesting, experts claim.
Not to mention Adelaide, Perth and Canberra.
After decades of little serious hotel investment in the nation’s smaller capital cities, for the first time, over the next 24 months, the majority of the nation’s new hotel rooms will be built in cities outside of the two tourism trophy towns, Melbourne and Sydney.
“We have absolutely rethought cities like Perth, Brisbane and Adelaide where a lot of the hotel product has become dated and boring,” Abhijay Sandilya, IHG’s Senior Director, Development for Australasia & South Pacific told AFR Weekend, adding while most of the company’s assets remain in Sydney and Melbourne, which continue to perform strongly, IHG now sees “significant growth potential” beyond these two key cities, where IHG includes such brands as the InterContinental, Kimpton and Crowne Plaza.
“There are very few of the popular new lifestyle hotels in those cities like Brisbane and Adelaide, but that’s changing. Across Australasia, IHG currently has its biggest-ever pipeline of new hotel signings on record.”
In another vote of confidence for the nation’s also-ran cities, on June 1, the trendy global W Hotel brand (owned by Marriott International) will re-enter the Australian market by opening Brisbane W at North Quay – long before it opens W Hotels in Sydney or Melbourne. W Brisbane will be the first five-star hotel to open in Brisbane City in 20 years.
It’s yet more proof the laid back river city, long nicknamed Brisvegas, is “threatening to become interesting,” says Sydney-based Dean Dransfield, managing director of analysts and advisory firm, Dransfield Hotels &Resorts.
“Brisbane beating Sydney and Melbourne on a W Hotel is a real ‘go figure’ moment in the industry,” says Dransfield. “It’s a great example of an internationally trendy brand giving a vote of confidence to the blandest city in the country.”
Dransfield points out that with more inner city developments going up, plus the mega casino slated for completion by 2022, Brisbane’s CBD will finally enjoy some semblance of nightlife. “Every boys’ or bucks’ weekend automatically deletes Brisbane as an option because there’s no inner city buzz at night. But as with Perth, Canberra and Adelaide, that’s changing in Brisbane. Diversity and sophistication are coming.”
IHG’s Holiday Inn Express Brisbane Central opened in April last year. General Manager Michael Foster is originally from Melbourne, but vouches Brisbane has surprised him with its energy. “November and February tend to be the city’s two busiest months with events and corporate travellers,” he says. “But Brisbane is simply not the sleepy country town everyone imagines – it’s got a strongly emerging entertainment and restaurant scene, plus the weather is perfect.”
Dransfield’s latest survey, Hotel Futures 2017, finds over the next six years, more than 24,000 new hotel rooms will be added to Australia’s existing inventory of 100,000 rooms. “That’s almost 25 per cent growth,” he says. “And for the first time, more than half of those rooms will be built in cities outside of Sydney and Melbourne.”
He estimates Sydney and Melbourne will each get about 5500 rooms, with the remainder spread mainly across the other capital cities, along with the two “lifestyle cities” of the Gold Coast and Cairns.
For IHG, new builds and openings outside of Sydney and Melbourne include the Crowne Plaza Adelaide (pegged to open in 2020), the same year the new Holiday Inn Geelong will open in regional Victoria, plus a Hotel Indigo in Brisbane’s Fortitude Valley, while their Crowne Plaza Hobart is expected to open its doors in 2019. IHG’s $70 million Intercontinental Perth opened late last year.
Australia’s biggest hotel chain, Accor – currently trying to clear its proposed $1.2 billion acquisition of Mantra Group – was early off the mark in terms of this trend when it opened one of its boutique MGallery hotels in Brisbane, Inchcolm Hotel & Suites, in 2014, In June, Accor will open the $70 million new build Novotel Brisbane Southbank.
Last year the group unveiled its new Pullman Adelaide, which will soon undergo a refurb, while construction will begin in May on a Sofitel Adelaide – the first new-build international-brand luxury hotel for the city in almost three decades.
Like Dransfield, Sandilya points out hotel investment is simply following the market. “A lot of the hotel specific data for these cities is pointing in the right direction,” he says, adding Adelaide in particular is enjoying billions of dollars worth of infrastructure and a CBD rejuvenation, with hotels and restaurants a big part of that development.
Dransfield points out that by contrast, in Sydney, office and residential have replaced hotel rooms as the highest yielding use of the emerald city’s CBD real estate space.
“You also have to consider Sydney has the highest airport landing fees and air traffic,” Dransfield says. With a number of carriers now flying direct long haul flights out of cities like Adelaide, Brisbane, Canberra – and with Qantas about to start its daily Perth to London direct route – these cities are finally having their time in the sun.[/vc_column_text][/vc_column][/vc_row]