Australia’s Hotel Stock Primed for Overhaul

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Wednesday, October 15th, 2014
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A new report from Colliers International indicates that Australia’s hotel stock is set to experience its first major overhaul in more than two decades.

Colliers International’s Fresh New Look: Hotel Sector Gets a Make Over report states that the hotel stock of major cities in Australia will soon see a long overdue renewal of its “boring” inventory as a rash of fresh styles and brands hit the market.

Stephen Burt

Stephen Burt

According to Colliers International managing director of hotels, Asia-Pacific, Stephen Burt, the upshot of the nation-wide overhaul will be high-end accommodation which possesses its own distinctive regional flavour instead of conforming to a generic, international style.

“In the past, major international hotel operators have developed their brands around key offerings and, consequently, their hotels in Melbourne have been identical to their hotels in Chicago or Mumbai,” Burt said.

“While all the back-end systems will be the same, the hotel itself will be more sympathetic to its local environment, showcasing the local artwork, products, attractions and geographic features specific to the hotel’s location.”

Hoteliers currently making the effort to confer individual properties with their own distinct styles include Accor with its Sofitel So line, IHG’s Hotel Indigo, Marriott with its Autograph Collection and Starwood’s Aloft Hotels.

The upcoming overhaul will be the largest witnessed in Australia since the early 1990s, when projects launched during the property boom of the preceding decade were finally realised.

The timing of Australia’s hotel rejuvenation is also propitious given the hefty returns enjoyed by the sector, keen interest from overseas investors, and surging tourist numbers from the Asia-Pacific.

Over the past five years, the hotel sector has enjoyed average total returns of 11.7 per cent, as compared to 9.5 per cent for the industrial sector, nine per cent for retail and 8.7 per cent for office.

“With such strong returns from the sector, increased visitor numbers and a wave of capital coming into Australia to invest in this asset class, the time is right for the industry to reinvigorate,” said Burt.

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