There is a new wave of lifestyle-focused hotels opening across Sydney and Melbourne to cater for the dearth of rooms and the rising demands of international tourists.
Intercontinental Hotel Group is the latest to offer its new upmarket voco brand at Sydney's Haymarket precinct in Linzhu Australia’s mixed-use development at 430 Pitt Street, valued at about $61 million.
It will have a 17-storey tower with a sloping roof featuring unique green waterfalls, and have 301 rooms.
The property was originally slated as a Holiday Inn in 2017, however, as the growing precinct continues to develop and there is more of a need for quality accommodation options for business and leisure travellers in Sydney CBD, it became clear it was taking shape as an upscale hotel with a very distinctive character.
It is part of the new wave of "experience" hotels, whereby rooms are as much a part of the holiday as the city.
Lifestyle-branded hotels are becoming more mainstream and increasingly accounting for a larger share of the hotel universe, with several big hotel operators launching or purchasing their own boutique hotel brands over the past five years.
Some of the new entrants are the Veriu brand, IHG's Hotel Indigo and EVEN wellness, where weights and yoga mats are provided in the room, AccorHotels' Vibe and Art Series, Little Albion and the Next group's Kafnu Alexandria.
CBRE senior research manager Danny Lee said Sydney, Melbourne and Canberra had the largest share of boutique hotel developments, with boutique offerings representing up to 20 per cent of the pipeline and 12 per cent being the national average of CBD hotel developments.
Mr Lee added that the explosion of digital content and social media had given rise to the idea of authenticity and experiential travel, particularly among younger demographics.
"Experience-based travel is becoming prevalent across all demographics, but highly preferred by younger cohorts, giving boutique and lifestyle hotels the upper hand in the battle for customers," Mr Lee said.
"As the hotel environment witnesses an increasing level of competition between sharing platforms, independents and hotel chains, hoteliers are focusing on innovation and personality-based offerings in order to differentiate and retain market share."
These include hotels outsourcing food and beverage operations to master chefs, while others are going green and looking at sustainable development to meet the demands of eco-friendly visitors.
While there are new hotels being developed in Sydney, such as the W Hotel at Darling Harbour, there has been no significant development since the Sydney 2000 Olympic Games.
The Star Entertainment is also in the throes of planning for the new Ritz-Carlton hotel adjoining its casino and Darling Hotel complex at Pyrmont, while the Crown Group is constructing its resort and casino at Barangaroo.
In the core of the city, the Westin Hotel at the former GPO will be rebranded as the Fullerton Hotel Sydney.
In Melbourne, international hospitality company Next Story Group has acquired a new-build hotel at 167 City Road in Melbourne’s vibrant waterfront hub of Southbank.
The 16-storey, 162-room property is scheduled to open on September 1, 2019, in time for the AFL finals.
After a complete fitout, the hotel will deliver a guest experience that is reflective of the group’s upper-mid-scale LinQ Hotels brand from November 2019.
This will be the Next Group’s first hotel under its LinQ Hotels brand, which offers unconventional independent hospitality for the next generation of travellers.
Representing the group’s three core brands, the LinQ Hotel Melbourne Southbank will complement the Next Hotel Melbourne at 80 Collins Street, which is slated to open in 2020, and the Sage Hotel Melbourne, Ringwood, which has been in operation for more than a year.
According to Colliers International, the hotel sector is entering the era of refurbishment and repositioning as owners identify the need to stay competitive in a changing market.
"Money never sleeps, and neither do hotels," Karen Wales, Colliers International director of hotels, said.
Nigel Greenaway, Colliers International national director of hotels, said owners who carefully considered guests’ needs and used any property upgrade as an opportunity to reposition the asset would be the ones to get the most out of their renovation and improve the value of their hotel asset in the long term.