Save articles for later
Add articles to your saved list and come back to them any time.
Boutique hotels are applying the blowtorch to the traditional big-name brands as travellers seek out more experienced-based holidays in smaller, more intimate properties.
While boutique hotels have traditionally achieved lower occupancies, room rates and revenues than their larger international rivals, the tables have turned according to CBRE Viewpoint, highlighting a significant shift in domestic travel demand.
Guests are increasingly seeking a personalised, hybrid approach to their hotel stays.
Boutique hotels offer a wider range of experiences, from food from nearby restaurants to free bicycles for exploring; communal hubs and bars for work and leisure; and fun, retro furnishings. Visitors feel more “immersed” in the hotel than just getting a comfy bed and shower.
CBRE’s Australian head of hotels research, Ally McDade, said an analysis of market performance showed that boutique properties had outperformed ‘big box’ international hotels since the 2020 onset of the pandemic across all three key performance indicators: occupancy, average daily rate (ADR) and revenue per available room (RevPar).
On a RevPar basis, the basket of boutique hotels studied by CBRE performed over 50 per cent better, and occupancy rates and ADR were 21 per cent and 27 per cent superior, respectively, to the luxury international hotels in the analysis.
Sydney’s Trio Capital, the investment and asset management business of independent lifestyle hotel group Ovolo, is taking advantage of the demand and is selling 90-room boutique hotel The Woolstore 1888 in a move to recycle capital to fund the group’s continued growth and expansion. Ovolo will retain the management rights post-sale. The Pyrmont building – one of the oldest surviving sawtooth roof woolstores in Sydney – was converted into a boutique hotel in 2013.
Trio managing director Tim Alpe said the sale is part of the company’s plan to grow the Ovolo brand throughout Australia, New Zealand and selected Asia-Pacific markets.
“We have tripled our room count in the past five years, including adding two assets during the pandemic, and are looking to more than double our network via hotel management agreements, acquisitions, joint ventures and investment partnerships,” Alpe said.
CBRE Hotels’ Wayne Bunz and Michael Simpson have been appointed on the sale and said it is expected to generate significant local and offshore interest, underpinned by the Ovolo hotel management agreement.
“More than ever, hotel investors are looking for bespoke and boutique hotel offerings, and this opportunity will appeal to a broad range of prospective purchasers,” Bunz said.
Trio Capital is selling The Woolstore 1888 by Ovolo in Sydney, but Ovolo will retain management rights.
He added that over three years since the onset of the pandemic, many resulting trends are here to stay, with remote working, bleisure travel, staycations and the continued growth of social media use shifting guests’ preferences towards a personalised and hybrid approach to their hotel stay.
In Sydney’s Surry Hills, the Cienna Group and manager La Vie are opening the Adge Hotel and Residences next month alongside the former Cambridge Hotel, which will also be rebranded as part of a $65 million transformation of the site.
Jerry Xu, chief executive and founder of La Vie Hotels & Resorts, said Adge was designed in collaboration between Tzannes and Team 2 Architects, with interiors by SJB, and will “mirror the unique spirit and energy of Surry Hills through bold colours, eclectic furnishings and plenty of personality”.
“More than ever, hotel investors are looking for bespoke and boutique hotel offerings, and this opportunity will appeal to a broad range of prospective purchasers.”
InterContinental Hotel Group (IHG) is expanding its boutique Hotel Indigo brand with two new sites coming to Melbourne, plus one opening in Potts Point in Sydney later this year, and another scheduled to open in the City Tattersalls Club redevelopment on Pitt Street in 2025.
Pro-invest Group, which owns the Potts Point site, has undertaken a multi-million-dollar transformation of the former Larmont Sydney by Lancemore. The redevelopment marks a new chapter for property – and the debut of the Hotel Indigo brand in Sydney.
Jan Smits, Pro-invest Group’s Asia-Pacific chief executive, said they purchased the property knowing “we had the opportunity to bring it to life in a whole new way for guests and the local community”.
Travellers are turning away from big-name hotel brands as they seek more immersive experiences.Credit: iStock
“The hotel’s location puts it front and centre of Sydney City council’s revitalisation program and the re-energising of the area’s 24-hour economy … our team can’t wait to be a part of that,” Smits said.
Matt Tripolone, managing director Australasia & Pacific at IHG Hotels & Resorts, said IHG is enjoying its largest-ever period of growth in the region, with numerous openings under brands including InterContinental, Kimpton, Vignette Collection, voco, Crowne Plaza and Holiday Inn.
McDabe said the continued recovery of corporate travel and international arrivals, coupled with more Australians travelling abroad, will broaden the mix of hotel business demand and ultimately moderate the exceptional outperformance that has come from the boutique sector in the past two years.
“The continued growth of boutique hotels in Australia will rely on their ability to deliver a personalised offering, while capitalising on new and emerging travel trends such as bleisure, where a leisure component is added to a business trip; workations, where some work is tacked onto a holiday; and dog-friendly travel such as Ovolo’s V.I.Pooch stays,” McDabe said.
In Sydney’s west, Accor Pacific is opening the Pullman Sydney Penrith and Western Sydney Conference Centre (WSCC) to cater for the growth in the area and the new airport.
Located at the foot of the Blue Mountains, it is the area’s first five-star hotel and a new state-of-the-art conference centre with 153 rooms and suites.
Pullman Sydney Penrith will service the WSCC, which is adjacent to the hotel. The WSCC features dynamic and sophisticated flexible conference spaces which span over 1250 square metres.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Most Viewed in Business
From our partners
Source: Read Full Article