Hotel stock gets a makeover

Hotel stock gets a makeoverAustralia’s stock of hotels is set to undergo a revitalisation not seen since the early 1990s, according to Colliers International’s latest report, ‘Fresh new look: Hotel sector gets a make over’.Many of Australia’s leading cities will soon experience a rejuvenation of their hotel room inventory, says the report, with new property styles and brands about to come to market. Colliers International says it’s an exciting time for the hotel industry, which has struggled with ‘boring’ inventory for some time.According to Colliers International, Australia hasn’t experienced a resurgence in hotel stock of this magnitude since the early 1990s, when many of the products conceived during the late 1980s property boom came to fruition. A number of high-quality hotels were opened in Sydney to coincide with the 2000 Olympic Games. Since then, however, the country’s accommodation inventory has been primarily developer stock, which the report says is unlikely to make a long-term sustainable contribution to the fabric of the Australian hotel market.Stephen Burt, managing director of hotels, Asia-Pacific, for Colliers International, said visitors to Australia’s major cities will soon have their pick of high-end and boutique accommodation options. And they will increasingly find hotels that celebrate local influences rather than conform to a one-size-fits-all approach.”In the past, major international hotel operators have developed their brands around key offerings and, consequently, their hotels in Melbourne have been identical to their hotels in Chicago or Mumbai,” he said.”So while all the back-end systems will be the same, the hotel itself will be more sympathetic to its local environment, showcasing the local artwork, products, attractions and geographic features specific to the hotel’s location.”He cites Accor’s Sofitel So, Marriott’s Autograph Collection, IHG’s Hotel Indigo and Starwood’s Aloft Hotels as brands that allow their hotels to express their individuality.The opportunity is there for the hotel sector to undergo the transformation it needs, said Burt.”With such strong returns from the sector, increased visitor numbers, and a wave of capital coming into Australia to invest in this asset class, the time is right for the industry to reinvigorate,” he added.Total returns from the hotel sector have averaged 11.7 per cent over the past five years, outperforming industrial (9.5 per cent), retail (9 per cent) and office (8.7 per cent).Find the Colliers International report here