Major and mid-level hotel brands are on the front foot buying up existing hotels, commercial properties and other brands to develop new hotels due to a stark shortage of open real estate in key capital city markets in Australia and New Zealand, a new report into the sector has detailed.
The iProsperity quarterly Hotel Market Analysis Report for Q2 2018 outlined a trend by major brands including AccorHotels, IHG and Marriott buying up properties previously managed by mid-tier brands such as Minor Hotels and Prince Hotels as well as buying low-tier brands to bolster their own portfolios. The report details cities such as Sydney, Melbourne, Canberra, Gold Coast, Auckland and Queenstown where real estate in key business and leisure areas for new hotels is in short supply.
The biggest market mover was AccorHotels, which received approval during Q2 to purchase the Mantra Group made up of BreakFree, Peppers, Mantra and Art Series brands. Other significant movements included the introduction of the ‘voco’ brand from IHG which will be installed at the Watermark Hotel on the Gold Coast. Marriott was also active in the period, developing two new Four Points locations in Melbourne’s Docklands and Sydney’s Broadway precincts.
Asian investors also bought up big in the Q2 period, with Chinese state-owned investment firm Jin Jiang International buying the Radisson brand from HNA Tourism.
The third quarter is expected to be stronger and heavily contested, with known hotel and resort assets going on the market. Those known to be listed include the Westin and Aloft properties in Perth and Pullman on the Park, Melbourne. In Sydney, the prize listing will be the Pullman, Novotel and Ibis hotels at Sydney Olympic Park, while the Paramount Hotel will also be on the block as will the Novotel Canberra. Outside the major cities, QT Port Douglas and Tangalooma Resort on Moreton Island, near Brisbane are also set to be listed.
“The number of international visitors to Australia continues to climb, with 8.3 million tourists spending up to $42.3 billion until the end of March 2018, up $2.4 billion year-on-year. These visitors spend a colossal 269 million nights in Australia during their travels. This upward trend is showing no sign of abating and is resulting in a hotel buying frenzy in the absence of development opportunities,” iProsperity Group CEO Michael Gu commented.