Industry News

June 30, 2016

Starwood announces new hotels for Sydney and Sunshine Coast

Starwood announced two major new hotels in less than a week. A new Four Points by Sheraton is set for construction as part of the $2 billion Central Park urban village on the former Broadway brewery site. The hotel will be developed in partnership with Frasers Property Australia and Sekisui House Australia. The 297-room new build hotel is scheduled to open in 2018 as part of a mixed-use development.

Highlighting the renaissance of Japanese capital in Australia, Sekisui House also announced they would develop a Starwood-managed Westin Resort at Yaroomba Beach (next to Coolum) on the Sunshine Coast. The hotel is part of a massive urban development project and is scheduled to be completed in 2021.

More hotel changes

Sofitel will take over from Starwood to manage what is currently Sheraton Noosa, while the Four Points by Sheraton at Sydney’s Darling Harbour will be rebranded later this year as a Hyatt Regency. The hotel is set to add over 200 rooms and a new convention centre in a $250 million redevelopment and will cement its position as Australia’s largest hotel with a total of 892 rooms when the project is completed. For Hyatt, it represents a return of the brand in Sydney after they departed the famous Hyatt Regency Kingsgate nearly 20 years ago.

 Mantra Group announces two new properties.

Mantra Richmont Hotel has opened inn Brisbane’s Spring Hill. The full services 110 room hotel has been developed by Malaysian-based Richmont Holdings. Mantra Group will manage the $40 million Wallaroo Shores Resort when it opens on South Australia’s Yorke Peninsula in mid-2017. This 4 star 100 room resort is being developed by Adelaide-based Monopoly Property Group.

Chinese investors bullish on Australia’s tourism/hospitality assets

The opening of Pullman Sydney Airport marks a new phase in China’s strong investment interest in Australian tourism real estate. While projects such as the 5-star Primus in the Sydney CBD highlight their appetite for trophy hotels, the purchase by the Nanshan Group of the $84 million Pullman Sydney Airport shows that the interest extends to hotels in suburban areas. Nanshan followed that up with a 20 per cent stake in Virgin Australia, cementing their interest in Australia’s tourism sector. They were then joined by another Chinese company, HNA Aviation Group, who took a 13 per cent (AUD$159 million) stake in Virgin Australia.

According to a report on the growth of Chinese investment in Australia by JLL Hotels’ Peter Harper: “Chinese investors have picked up some the cream of Australia’s hotel crop in the past few years, including Sunrise’s $463 million purchase of Sydney’s Sheraton on the Park, joint venture Far East Land & Sino Land Company’s purchase of Westin Sydney for $445 million, followed closely by Bright Ruby’s purchase of Hilton Sydney for $442 million. Chinese investors also acquired Ribbon Darling Harbour and transformed the former Sydney Metropolitan Water Sewerage and Drainage Board HQ in Pitt Street, Sydney into the five-star Primus Hotel.

 “While these acquisitions demonstrated the Chinese appetite for buying premium ‘trophy’ assets in CBD locations, the purchase of the Adina Mascot, Clarion on Canterbury and Pullman Sydney Airport also reflects a willingness to invest in emerging commercial districts.”

The Chinese investment interest comes on the back of record inbound flows by Chinese travellers into Australia. There are now over one million Chinese tourists – an increase of over 19 per cent on the year to April 2016 (and up from just 350,000 in 2009) – and Chinese tourists now account for 23 per cent of total expenditure (over $7 billion) by overseas visitors.

Meriton eyes number one spot

Meriton’s Harry Triguboff believes his company will become Australia’s largest owner of hotel rooms by the end of this year, overtaking the Abu Dhabi Investment Authority (which purchased the former TAHL portfolio). Meriton has several new projects in the pipeline which will take their hotel suite numbers to 4621 rooms by the end of 2016, eclipsing the Abu Dhabi Investment Authority’s current inventory of 4352 rooms. Meriton expects to have 5296 hotel suites by year-end 2017.

Hoteliers question Expedia’s motive for new guest communications portal

Some smaller hotels are questioning why Expedia has withdrawn their ability to connect directly with guests booked through the Expedia site prior to their arrival at the property.

Expedia has introduced its ‘Partner Central Conversations’ portal which hoteliers must now use to communicate with guests booked via the site. Hoteliers argue that this has safety implications and say that the system is unworkable if they need to urgently contact the guest at the last moment. Expedia disagrees, arguing that the new portal will provide guests with an “easy-to use means to communicate with their selected property before and after their stay whilst protecting guests’ privacy.”

Expedia’s move follows a strong stand by major hotel groups such as Hilton, Marriott and now IHG promising that members of their loyalty clubs would receive better rates than any OTA could offer.

IHG launched its Lowest Price Promise – a guarantee that guests will get the lowest rates when they book directly with IHG – following a survey it commissioned which reported that 76% of Britons surveyed said they chose to book through price comparison sites because they believed they could guarantee the best rates, with only 12% booking direct.

The moves by the major hotel groups are designed to reinforce that by becoming members of their loyalty programs and by booking direct, guests will gain access to best rates in the market.