REGIONAL REPORT

proposed and in advanced stages of planning , according to data from Tourism Accommodation Australia .

In December , Sydney also saw the opening of its new International Convention Center , a A $ 1.5 billion ( US $ 1.2 billion ) exhibition development in Darling Harbour . Even though the ICC only just opened , Sydney-based Horwath HTL consultant Stefan Muff says there ’ s a general fear that the center will take away demand from the more events-driven Melbourne and stop hoteliers from pushing rate .

“ Melbourne is a smaller hotel market , so the impact of that supply will likely be larger than in Sydney , meaning occupancy may drop more in Melbourne in the coming years ,” says Muff , adding that he thinks hoteliers may be apprehensive of future supply additions in the city .

LEISURE HOLDING ITS OWN In the back half of 2015 and 2016 , high asset pricing in Sydney and Melbourne led

Data current 03 / 15 / 17

Source : Lodging Econometrics

investors to look at second-tier markets for potential expansion , according to Rob Cross , national director , CBRE Hotels . Leisure markets , like Cairns and the Gold Coast , have piqued investor interest with double-digit growth in hotel market indicators . In 2018 , the Gold Coast will host Australia ’ s Commonwealth Games , which could also mean a significant boost to the region .

“ Investors are looking to capitalize on this and the substantial increase in overseas visitors , particularly from China ,” says Cross .

It ’ s growth that comes off a low base , however , as both markets had been underperforming for the past several years . Though neither city has significant pipelines , recent development announcements in Cairns mean supply should remain stable in the medium to long term , with record tourist levels meaning further growth in occupancy and room rates , CBRE says .

One local player getting in on the Cairns action is Event Hospitality &

Sydney ’ s massive A $ 1.5 billion ( US $ 1.1 billion ) International Convention Centre ( ICC ) opened in Sydney in December – officially Australia ’ s largest integrated convention , exhibition and entertainment center .

Though Accor ’ s 5-star Sofitel Sydney Darling Harbour will be the center ’ s official hotel partner once it opens in November , the Ovolo 1888 Darling Harbour has singled itself out as the neighborhood ’ s only boutique property . Ovolo CEO Girish Jhunjhnuwala acquired the cush location for A $ 33 million ( US $ 25 million ) in 2014 from Sydney-based 8Hotels .

According to 1888 GM Amanda Cottome , while other investors were turned off by the property ’ s size , Jhunjhnuwala saw an opportunity . “ Foreseeing the growth in business travel to Sydney , he followed his gut , made the bid and acquired the hotel .”

Ovolo hired design firm Luchetti Krelle to refurbish the interiors of the hotel , which had branded itself as the first “ Instagram-friendly ” hotel following a 2013 renovation under 8Hotels .

Cottome says the hotel is observing an influx of domestic and international travelers attending events at the ICC , and the hotel ’ s daily occupancy has hovered at 90 %. “ The ICC is underpinning a new wave of financial investment in new hotels and refurbishments and driving additional demand for rooms ,” she says .

30 hotelsmag . com May 2017