InterContinental Hotels Group is set to increase its exposure in the country’s hotel sector with a new Holiday Inn Express® in the ever-expanding Macquarie Park precinct in Sydney’s north.
It is being developed by international investment company, Pro-invest Group, which has established a $300 million fund to develop a portfolio of up to 15 Holiday Inn Express® hotels across Australia.
This follows IHG’s move into Melbourne with Pro-invest, under a franchise agreement for a 339-room Holiday Inn Express® hotel in Melbourne’s Southbank area.
The first hotels will open this year, with the launch of the brand at Sydney’s Macquarie Park, North Ryde in April, followed by Brisbane’s Spring Hill in the fourth quarter of 2016, Adelaide Hindley Street in 2017 and Melbourne Southbank in 2018.
Phil Kasselis, the Managing Director of Pro-invest Hotels Group and Matt Tripolone IHG’s Director of Development, said the hotel sector was one of the hottest, but the limited development in the past decade meant offerings were “tired”.
As part of the Sydney building boom, there is a new Sofitel being developed by Dr. Jerry Schwartz at Darling Harbour and a planned Crown Resort at Barangaroo, but that is all in the city.
“We have joined with IHG to offer a high-quality product in the fast-growing Macquarie Park precinct that will offer a full service to a range of guests,”Mr Kasselis said.
Mr Tripolone said Sydney was the first Holiday Inn Express® to launch in Australia and that Holiday Inn Express® is the fastest-growing hotel brand in the world.
“Select service does not mean ‘cheap’. The rooms have been designed by the international designer Joseph Pang who designed the InterContinental rooms for Sydney and Melbourne. They offer smart design and effective use of space.”
Mr Tripolone said the new brand offering came at a time when the Australian hotel sector was riding high. “We are seeing more domestic, leisure and corporate travel, so there is a high demand for a hotel that offers a range of amenities,” he said.
Drenka Andjelic, Managing Director, Construction Assignments Chairwoman, NSW Hotel Property Committee, Property Council of Australia, said overseas investor confidence with hotel ownership changing hands is at an all-time high in Australia. Asian investors are snapping up Australian hotels.
“New owners have voiced mandates to re-set 5 star hotel standards in Australia with respect to global 5 star benchmarks. Some of these new players in Sydney include Pontiac, Wanda and Greenland,” Ms Andjelic said.
The new Holiday Inn Express opens at a time when Sydney’s CBD and metropolitan hotel markets are on a high with full-year STR data reporting exceptional occupancies and average daily rate (ADR) levels across the board.
In Sydney city, hotel occupancy increased marginally on existing highs to 88.2 per cent for the full year, while the average daily rate increased by 6.6 per cent to $243. The five-star market followed similar growth trends with occupancy at 88.6 per cent and ADR now nearing $300.
Craig Collins, chief executive Australasia, JLL Hotels & Hospitality Group, said Sydney hotels were having a golden run and this should “absolutely continue”.
“A function of reduced supply, Ryde had the largest average daily rate gain out of the three markets at 13.5 per cent to finish the year at $171 with an occupancy of 78.5 per cent,” Mr Collins said.
Peter Harper, Senior Vice President, JLL Hotels & Hospitality Group, said the substantial growth seen over 2015 in Sydney’s metropolitan markets, whilst contributed to by CBD overflow, was a product of increasing demand for quality hotel accommodation in these areas.
“Investor demand remains at an all-time high yet the level of available stock is probably at a decade low at the moment. There’s no doubt that investment market conditions remain in favour of hotel owners,” Mr Collins said.
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