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Hotel refurbishment market continues boom phase

Stylish: Novotel Brisbane

Australia’s hotel and leisure refurbishment market is going through a boom phase that will see billions spent on upgrades to casinos and hotels in the next five years.

Led by the AUD$860 million rebuild and expansion of The Star complex in Sydney it is one of the most active construction markets in Australia.

ISIS National Executive – Hotels and Leisure Brett Patterson said 2011 was a stellar year for the company, having won the fitout for the lavish $17 million Manhattan  night club at The Star Casino and the creation of a new high roller gaming room in the former Astral Restaurant and Bar on the roof of the casino.

ISIS also won a total of $180 million of contracts for the refurbishment of 17,000 sqm of gaming floors at The Star that was delivered on time and on budget while the casino operated 24/7 around them.

Late last year, ISIS handed over the $20 million fit out of thirteen VIP suites on top of The Darling Hotel – said to be some of the most luxurious and extravagant in Sydney.

Patterson said it was a challenging project located on the upper floors of the hotel with every suite offering individual interior design and a wide range of luxury finishes sourced from across the globe. 

He said the four penthouses feature their own private gaming rooms which were documented by Casino design expert Laurence Lee Associates from Los Angeles

Like a number of The Star projects, including the nightclub, the suites were executed by high end architectural US firms, documented in Australia and then transferred onto the blank building canvas by ISIS’ high quality construction teams.

Patterson said one of the keys to the success of ISIS was its goal of achieving “perfect delivery”, a corporate target that has seen the company win several awards in 2011.

These include the 2011 NSW Master Builders Association award for the best fitout for a project under $5 million for its work on the Cherry Bar at The Star and in September ISIS won a series of State awards from the South Australian MBA.

“Perfect Delivery is when a project is delivered on time and budget, with no defects on hand over and all operating manuals supplied within a week of completion – and most importantly meets the key client value established at the commencement of the project.

“It is an overall business concept that with the assistance of our UK alliance with Overbury will set ISIS at the top of the industry when it is achieved,” Patterson said.

He said ISIS had completed the refurbishment of the Hilton hotels in Cairns and Brisbane and the Café Opera bar at the Marriott in Sydney, plus the Florida Beach Bar at Terrigal Crown Plaza, in the past 12 months.

In addition ISIS recently completed the fitout of the Marriotts in Melbourne and Surfers Paradise and Novotel Brisbane for the second time in seven years (it has repeat business of refurbishing all guestrooms from eleven hotels) and has been appointed to undertake the first stage of the $80 million refurbishment of the landmark Ayers Rock Resort.

Patterson said one of the strengths of the ISIS business was its ability to undertake refurbishments in an operating hotel without disrupting business and working with the hotel to improve revenue.

“We are experts at working in operating environments and ensuring there are no defects and no interruption to the guest experience,” he said.

Patterson said the hotel market refurbishment cycle for hotels was “pretty strong” with $300 million-$400 million of refurbishments programmed across Australia for 2012. The availability of suitable sites and cost of construction was still prohibitive for the construction of new CBD hotels.

He said demand from new hotel owners, and the push from new Asian hotel chains into Australia, was driving refurbishments in hotels that were coming to the end of their 7-10 year lifecycle.

“The Perth market is very hot at the moment and Sydney is heating up as owners are getting a raft of new hotel refurbishment work designed and are expected to be calling for tenders in the new year,” Patterson said.

In addition Echo Entertainment is planning to spend $600 million on the refurbishment of Jupiters Gold Coast, Brisbane Treasury Casino and Jupiters in Townsville in the next five years.

Crown has just spent a lot of money upgrading its facilities in Melbourne and Perth while Sky Casinos is expected to refurbish its Adelaide and Darwin casinos commencing in 2012.

Patterson said the strength of the Australian dollar had not affected business travel and was driving upgrades on hotels in the CBD hotel market which are experiencing record levels of demand whilst the leisure hotel markets were experiencing a decline

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