Australian hotels enter new era of refurbishment to adapt to changing market

Ageing assets to undergo operational and design changes to remain competitive: Colliers International

Australia’s ever-popular hotel sector is entering the era of refurbishment and repositioning as owners identify the need to stay competitive in a changing market.

According to Colliers International, maintaining facilities to the standards expected by discerning guests and determining how and when to upgrade those facilities is one of the biggest challenges faced by hotel owners.

“Money never sleeps, and neither do hotels,” Karen Wales, Colliers International Director of Hotels, said. 

“It is a simple fact that eventually every property will need an upgrade but with the opening of more than 15,000 new rooms over the past three years, existing owners will need to consider expediting the renovation cycle to compete with significant new supply.

“The majority of Australia’s accommodation rooms were built in the 1980s, 1990s and 2000s. The owners of these properties will need to give greater regard to major capital refurbishment plans, particularly if ongoing repairs and maintenance have not been maintained.”

Nigel Greenaway, Colliers International National Director of Hotels, said.  said owners who carefully considered guests’ needs and used any property upgrade as an opportunity to reposition the asset would ultimately be the ones to get the most out of their renovation and improve the value of their hotel asset in the long-term.

“Capital expenditure can be initiated for many different reasons such as commercial business opportunity, compliance with current legislation (WHS/NCC/DDA), end of life replacement or meeting consumer trends,” Mr Greenaway said. 

“But it should ultimately have the common objectives of maintaining market position and/ or upgrading the hotel business, increasing owners’ return in this highly competitive market with the future long-term goal to increase the real estate value of the property.” 

Mr Greenaway said while a successful hotel refurbishment or renovation came with significant challenges, a major property refresh presented a hotel with the unique opportunity to reposition itself in the market and ultimately support its longer-term revenue goals. 

“Owners that take a considered approach, determining the right time to relaunch renovated rooms while also having the right pricing strategies in place, will ultimately get the most out of their renovation,” he said.

“Refurbishments can include both soft and hard elements, as well as a Return on Investment component.”

Ian Pert, Colliers International National Director of Project Management, said first impressions were of vital importance to helping guests distinguish between hotels or brands.

“The design of a hotel, both interior and exterior, is often the most effective way to make an exceptional first impression,” he said. “Product offerings are also changing as hotels look to satisfy new ways of living and working. 

“Current trends include a greater focus on the lobby as a central meeting point and the development of new food and beverage concepts which showcase local produce and meet a growing awareness of health a wellbeing.

“The hotel sector is also under increasing pressure to reduce its environmental footprint and develop truly sustainable operations. Hotel buildings have significant opportunities to reduce their energy, water consumption and greenhouse gas emissions and we will see this become a key focus as a growing number of owners look to refurbish.”

Mr Pert said refurbishment programs rolled out in the near future would also have a greater focus on technology and distribution.

“Guests have a high expectation when it comes to technology capability, particularly of a high-end hotel,” he said. “Most guests are self-sufficient, tech-savvy travellers who expect seamless connectivity across platforms and devices. 

“New developments include service automation, mobile device as door key and on-demand technology in relation to smart televisions.”
 

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Karen Wales

Director |Transaction Services, Hotels Asia Pacific

Sydney CBD

Karen has over twenty years of experience in the hotel industry and holds a Masters of Business Administration (MBA) from the Australian Graduate School of Management. She brings with her a specialised knowledge of the Asia Pacific hotel investment market and an ability to drive fresh capital into Australia’s hotel markets. She has developed an exceptional network over the past two years across Asia and the Middle East and within government, in her capacity as Senior Investment Specialist Tourism Infrastructure at Austrade and her knowledge of new entrants into the growing Australian tourism sector is second to none.      

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Nigel Greenaway

National Director

Sydney CBD

For over 27 years, Nigel’s career in the hotel industry has spanned hotel operations and finance, working for leading hotel operators and more recently, heading two of Australia’s leading wholesale hotel investment funds.

Prior to joining Colliers, Nigel spent 10 years as the Fund Manager of Eureka Fund Managements First Core Fund. The fund comprised hotel investment in branded hotels such as InterContinental, Four Seasons, Crowne Plaza and Holiday Inn. He led the fund team in establishing an investment in over $1.0bn of hotels in Australia and New Zealand. Nigel was responsible for the entire fund strategy of acquisition, repositioning, asset management, equity and debt capital strategies and exit strategy.

Nigel commenced the hotel investment stage of his career with Colonial First State Property as an Asset Manager for the portfolio of Marriott hotels in Australia before taking the funds lead role as Fund Manager.

In the early part of Nigel’s career, he held a number of Finance Director roles for Southern Pacific Hotels Corporation (now IHG) in Australia and the Pacific. After a period, as Regional Director of Finance for the Northern half of Australia he established his own hotel finance consulting group which provided accounting and financial related services to hotel operators and owners in Australia, New Zealand, Vanuatu and Fiji.

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Ian Pert

National Director, QLD

Brisbane CBD

Ian has over 36 years’ experience in the development industry and has a strong financial focus in property projects.Ian started his career in Scotland before working in Qatar and Sydney before moving to Queensland in 1990.  Ian's experience covers numerous sectors including  hotels,  high rise residential, retail, retirement and hospitality projects.  A well known and respected industry figure in S.E Qld, Ian specialises in Development and Project Management Services.  Ian’s early involvement in projects with strategic advice helps ensure the overall project success,  with a particular particular focus on tourism, hotel consultancy and residential projects.

Ian is a National Director of Colliers International Project Leaders which acquired GMP Management in 2018.  Under Ian’s stewardship, GMP grew to be the largest Project Management Consultancy on the Gold Coast and expanded into Brisbane  and Darwin.

Ian heads up our Queensland division,  but is very much a hands on director,  working out of both our Brisbane and Gold Coast offices.  He has delivered some of S.E. Qld most notable projects including Westin Hotel and Mary Lane Residences, Pullman and Ibis Hotels Brisbane Airport, Novotel Southbank and Twin Towns Services Club.

 

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Laura Phillips

Associate Director | PR & Communications

Melbourne CBD

Part of the Australian media landscape for 10 years, with a background in newspaper and magazine journalism, including property reporting. 

Fostering strong relationships with property and business journalists and editors across national, state and local media, from newspapers and online publications to television and radio.

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