9 minute read
DEVELOPMENT: THE PRICE IS RIGHT
The price is right
AMID THE INCREASED COST OF LIVING, CONSUMERS ARE SEEKING OUT QUALITY ACCOMMODATION OFFERINGS AT AFFORDABLE PRICES. HOTEL DEVELOPMENT EXPERTS SHARE SOME OF THEIR KEY FINDINGS ACROSS THE BUDGET, ECONOMY AND MIDSCALE SEGMENTS.
ACCOR PACIFIC
Lindsay Leeser, Chief Development Officer
As midscale and economy brands continue to prove a popular choice for travellers to city and regional destinations, interest from owners in Accor’s iconic Novotel, Mercure and ibis brands remains strong.
These hotels offer travellers a blend of affordability and quality, meeting the demands of both leisure and business travellers. The key to their success lies in their ability to deliver a consistent and welcoming guest experience and a sense of local authenticity. Mercure Doncaster and Novotel Christchurch Airport are examples of this, contemporary midscale properties in convenient locations which give guests a great experience.
In 2024, Accor will be unveiling Tribe Auckland. Tribe originated in Perth and is a popular midscale brand characterised by contemporary, innovative and boutique design. Following the successful openings of Tribe hotels Paris, London, Amsterdam, and Bali, this home-grown brand is growing its global footprint.
Mantra, Australia’s largest hotel brand with 75 properties across the country, is renowned for having a great selection of hotels, resorts and spacious self-contained apartments in vibrant cities and favourite holiday hotspots. Mantra Epping is a good example, located just 15 minutes from Melbourne Airport and with state-of-the-art conference facilities, this property provides comfort and convenience for long and short stays.
By offering a quality guest experience at an affordable price and maintaining a commitment to sustainability, Accor is growing market share and setting a benchmark for the industry as a whole. The continued success of these brands signals a bright future for Accor in the hospitality landscape.
BWH HOTELS AUSTRALASIA
Danilo Curcuruto, Director of Development
As the hospitality landscape continues to evolve, BWH Hotels finds itself at the forefront of a dynamic market. With a diverse portfolio spanning from luxury to economy, BWH Hotels has been setting trends and adapting to new realities.
The midscale and economy segments pose a unique set of challenges for the accommodation sector. Competition is fierce and customer expectations are on the rise. Staying competitive requires a delicate balance between providing value and maintaining quality. Additionally, the industry has been greatly impacted by global events, requiring adaptability and resilience.
Despite the challenges, the midscale and economy segments offer significant opportunities for expansion. With the growing trend of experiential travel, budget-conscious travellers are also seeking unique, authentic experiences. BWH Hotels is well-positioned to capitalise on this trend by providing value-driven stays in desired locations around Australasia.
The midscale segment has been the backbone of the Best Western brand, while the award-winning SureStay brand continues to dominate the economy sector. Looking ahead, BWH Hotels has ambitious plans for the midscale and economy segments. The focus is on enhancing guest experiences, embracing sustainability and expanding the portfolio in strategic locations. BWH Hotels aims to leverage technology to personalise guest experiences further and streamline operations for owners and operators. These segments continue to receive our unwavering commitment to deliver exceptional value and quality.
With a forward-thinking approach and a commitment to expansion, BWH Hotels is poised to continue its success in these dynamic segments, offering hospitality excellence for its hotels and travellers alike.
CHOICE HOTELS ASIA-PAC
Scott Armstrong, Director of Development Australia and New Zealand
Choice Hotels’ International has found success in midscale accommodation across the globe for more than 80 years. Choice Hotels Asia-Pac has continued strength in this segment with 70% of our portfolio positioned in the midscale Quality and Comfort brands.
We’re experiencing unprecedented pipeline demand and conversion in midscale and upper midscale segments, particularly in regional Australia. Regional areas boomed during metro lockdowns and rather than settle for their pre-Covid revenue, or fall behind in an increasingly competitive market, they’re looking to brands to increase their distribution presence, maximise their revenue potential and deliver more corporate travel.
The return of corporate travel remains core to the consistent success of Choice Hotel Asia-Pac’s midscale and economy segments. During the first half of 2023, Choice reported a 65% year on year increase for Q1 and a 26% year on year increase for Q2 in GDS room nights.
In addition to growing corporate business, loyalty programs continue to be an attractive key to success for the midscale and economy segments. Choice Hotels’ award-winning Choice Privileges loyalty program now has more than 550,000 members in Asia-Pac delivering repeat business and higher-value stays for properties across the portfolio.
Choice Hotels Asia-Pac has seen increased interest in the midscale and upper midscale segments from commercial accommodation developers looking to diversify their guest profiles and maximise return on investment.
With building materials and fit-out costs at record highs, developers see the midscale segment as a sweet spot to deliver a feasible accommodation product that appeals broadly with both the leisure and corporate markets.
IHG HOTELS AND RESORTS
Cameron Burke, Director of Development – Australasia and Pacific
Whilst development appetite for accommodation assets in primary markets is currently principally centred around aspirational positioning, demand remains prevalent for midscale offerings in secondary, tertiary and regional markets.
As the world’s largest and most recognised hotel brand family, Holiday Inn continues to be incredibly attractive for developers in these markets across Australia and New Zealand – with IHG Hotels and Resorts opening seven Holiday Inn family-branded hotels in the last two years and another five set to open by 2025.
We recently welcomed the 124-room Holiday Inn Dandenong to our estate, which has strongly delivered on the brand’s refreshed hallmarks and next generation design. We are also delighted to have opened Holiday Inn and Suites Geelong this September. This stunning 180-key property is located in the heart of Geelong and features market-leading design complete with a restaurant by celebrity chef Adrian Richardson and I think it’s set to become a culinary beacon and crown jewel for Victoria’s second largest city.
In response to growing demand within the global mid-market, we are also excited to have welcomed a new midscale brand to our strategically expanding brand suite. Designed to target midscale conversion opportunities, our newest brand Garner is set for a rollout from 2024, initially in the Americas.
In the meantime, we look forward to further strengthening our market presence within the midscale segment as we look to expand into new markets across Australia, New Zealand and the Pacific Islands in 2024 and beyond.
LYLO, EVT
Tim Alpe, Managing Director
The irrepressible desire to travel is alive and is as strong as ever. Across EVT, we are seeing hotel bookings stabilise as business travellers and tourists search for out of the ordinary experiences across our portfolio, which covers all segments from luxury to budget.
More recently, we are seeing a new community of travellers being driven by two key factors; affordability and evolved travel needs. Travellers are combining work and leisure for extended periods of time, all whilst travelling on a budget.
As a result, budget accommodation is seeing growth. In December 2022, EVT launched LyLo Auckland, the first budget lifestyle property to open in New Zealand post-Covid and a new way to stay. LyLo is our style-led, value offering, designed for the modern traveller who wants to play, eat, work, and sleep – within a budget.
To meet these evolving market needs, we focused on more POD rooms and redesigned the POD experience, created well-equipped coworking spaces, communal kitchens for meal preparation and lounges to relax on at night. Whilst traditionally this style of accommodation has been popular with the youth market, a far more diverse range of guests are now staying at LyLo, with long-term stays (over a month) increasing, and strong room booking volumes, especially over the summer period.
LyLo is changing the budget accommodation offering, and continuing to expand to meet this increased demand, with LyLo now open in Queenstown and Christchurch, and extending to Brisbane later this year.
TFE HOTELS
John Sutcliffe, Director of Development
Our Travelodge hotels have been undergoing a quiet renaissance over recent times, with the opening of two properties in Sydney and Auckland adding to the portfolio of hotels in Hobart, Melbourne, Wellington, and Darwin, most of which have been recently refurbished – the brand has never been stronger.
Our recent opening, Travelodge Hurstville in Sydney, features a new Chada-designed direction for the interiors, a rooftop bar and restaurant, a ground floor grab ‘n go cafe, and the largest corporate function space outside of Sydney’s CBD. Whilst Travelodge Auckland is located at the heart of Wynyard Quarter – considered Auckland’s first taste of a funky, bohemian, industrial-chic neighbourhood. And, with pillows and duvets locally sourced and sustainably made from luxury microfibre derived from plastic bottles, the hotel ensures that TFE’s focus on sustainability continues.
Refurbished hotels include Travelodge Hobart, which has recently completed a multi-million-dollar refurbishment program that has seen upgrades to all guest rooms and public spaces, including a purpose-built yoga and Pilates studio.
As a brand, Travelodge Hotels focus on all the essentials that guests need, in great locations, at a price point that attracts multiple market segments. This elevation of the Travelodge brand has paid dividends, with strong uplifts in RevPAR flowing through to improved returns for owners, resulting in a renewed interest in the brand from developers. At TFE, we look forward to rolling out more Travelodge Hotels across Australia and New Zealand in the near future.
