Unfamiliar international hotel brands are ‘sussing out Perth’

Perth hotels – so pricey to construct, developers have been offered grants and lowered market rates.After years of inaction and escalating hotel room prices several international brands, including Hilton, are seriously considering opening or expanding in Perth.
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Hilton yesterday confirmed it was exploring options for a second hotel in Perth and the WA branch of the Australian Hotels Association said it was in talks with other big name chains.

“Some of them are well known in Europe and the US but not necessarily in Australia [and] some of them are Australian,” AHA WA chief executive Bradley Woods said.

“Over the next couple of years we expect that there will be additions to the international chain hotel names that are within the Perth market.

“We’ve had discussions with a number of chains about their interest in expanding the presence of their existing properties.

“WA is certainly on their scope.”

Hilton vice-president development Australasia Robert Scullin yesterday told an industry newsletter the international company planned to unveil more Australasian ventures during the next 12 months, including in Australia.

WA was high on the company’s sights and it was investigating existing Perth properties that could be converted into the capital city’s second Hilton hotel alongside the Parmelia on Mill Street.

“The Perth market is where every hotel would like to have more inventory,” Mr Scullin told Travel Today.

Hilton also has previously made it known it would like to build a resort in Margaret River, though it is understood issues with zoning stalled any plans.

There have been very few hotel rooms created in Perth in the past five years, causing a severe shortage that has seen capacity reach well over 80 per cent and prices to escalate.

The industry estimates 1900 new beds are needed in the city by 2020 to keep up with demand.

The situation led Minister for Tourism Kim Hames to announce groundbreaking incentives for hotel developers, including providing state land at reduced market rates, flexible floor space bonuses and infrastructure grants.

The former Fire and Emergency Services Authority headquarters on Hay Street in the CBD is the first government-owned site to be made available at a discounted rate to the hotel market.

The government is presently negotiating with potential developers.

Mr Scullin did not comment on whether Hilton was interested in the site.

Construction costs in WA – which are the highest in the nation – have made many hotel projects unviable.

But hotel developers are becoming increasingly interested in pre-fabricated techniques, allowing all or part of a project to be built in a factory and then assembled on site.

Hilton’s new 164-room hotel in Karratha, announced last week, will incorporate the technique, with the top six storeys built off-site and transported to the mining centre.

“The new model has certainly reduced the construction time and the size of the teams required to build a hotel,” Mr Scullin told Travel Today.

The new 56-room Quincy Boutique Hotel is being constructed in a factory in just seven months and will be transported to its site, a former car park behind the Perth Ambassador Hotel on Adelaide Terrace.

The ambitious Australian Pacific Hotels project was approved by the City of Perth in April.

A Tourism WA spokesman said Perth’s construction costs had stagnated hotel construction.

“In certain conditions modular construction definitely has the potential to reduce construction costs, which should impact positively on project viability,” he said.

Mr Woods said there was increasing interested in pre-fabrication of hotels but it was only suitable for certain sites that were “dead flat” and could be accessed by cranes.

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