Hotelier in long game on rebuild
The InterContinental Hotels Group (IHG) is looking at developing half a dozen new hotels around the country.
IHG’s chief operating officer for Asia, the Middle East and Africa, Alan Watts, said high occupancy rates and double-digit increases in revenue had made the Australasian hotel market a hot proposition with both domestic and international investors.
His group is in discussions about new hotels in Auckland, Wellington and Queenstown.
Singapore-based Watts signalled that three Auckland developments were on the cards and hoped to be in a position to make an announcement this week.
‘‘With the America’s Cup coming to Auckland in 2020, there’s a sense of urgency to add new stock to the CBD.’’
IHG recently opened a Crowne Plaza hotel in central Christchurch following conversion of the former Forsyth Barr office tower.
Watts, who started his career at the city’s long-demolished Park Royal hotel, was in town to view the new addition to the IHG stable.
He said the group also planned to build a 120-room Holiday Inn Express in Gloucester St, Christchurch. Its completion would be timed to coincide with the opening of the city’s new convention centre, which is scheduled for late 2019.
Refitting an existing building was much faster and there were fewer planning and development hurdles, Watts said.
Making a new build stack up in the current environment was a challenge given occupancy rates, and matching the pace of hotel development with that of the rebuild was critical, he said.
‘‘There’s a lot of parties with land in Christchurch that are taking a wait and see approach as to how the market evolves.
‘‘Timing is everything; city on the rise.’’ it’s a
Watts said it was a matter of looking five to 10 years ahead in Christchurch, ‘‘unlike Auckland and Queenstown where you would want to bring a product to market as soon as you possibly could’’.
Auckland’s new targeted rate levied on the capital value of hotels, motels and B&Bs has been blamed for putting a dampener on investment in new developments.
Watts said using state or regional taxes to raise funds for tourism infrastructure was common in the markets he worked in, and they were accepted by the visitors who paid them.
But the Auckland property tax fell on owners and he said it would be a concern if this form of revenue gathering spread to the rest of the country.
Last year a New Zealand Trade and Enterprise (NZTE) market analysis concluded that the country needed another 26 new hotels to meet demand.
The agency launched Project Palace to match investors with potential sites. NZTE’s investment general manager, Dylan Lawrence, said it had identified about 20 sites and done presentations in eight overseas markets.
That had resulted in one international investor buying land in Christchurch for a potential new hotel, and another four potential hotel developments were under negotiation across the country.