Hoteliers on a lucrative ride
Double-digit growth over the past year in most regions – this was the opening comment at the recent New Zealand Hotel Industry Conference at The Langham Auckland, by platinum sponsor AccorHotels senior vice president for New Zealand, Pacific and Japan, Garth Simmons. The comment was one other hoteliers, among the 300 delegates present, related to. “Three years ago I attended by first conference here when the environment was down and tough,” said Mr Simmons. “We now need to make hay while the sun shines as there is an inevitable time when the industry will turn again.” Mr Simmons added: “Over the next three years we are forecasting to recruit 10,000 employees in our hotels in the Asia Pacific region.” Big numbers were cited throughout the conference and this included hotels up for sale. The Sydney five-star market saw $2 billion in transactions over the past three years, said Colliers International director hotels Asia Pacific, Stephen Burt. “Big conglomerates are buying up all of the hotels in Australia.” In Auckland he noted the Ritz Carton, Park Hyatt and Sofitel So will soon be entering the market, but that other upscale hotels in New Zealand do need to be reinvigorated. “The losers will be those hotels not recapitalized and not refurbished.” As far as hotel design goes, Mr Burt noted all chains were introducing lifestyle brands. “Every single chain worldwide is using the same words to sell their lifestyle brands with designs sympathetic to the local community. Execution of brand promises, however, is going to be based on having properly-trained staff.” China, he noted, will continue to be the dominant source of capital in this region. “At the moment it is a trickle. Soon it will be a waterfall.” In the Asia Pacific region hotel transactions reached $7.5 billion last year, according to Jones Lang LaSalle managing director investment sales Australasia hotels and hospitality Mark Durran. Much of this has been driven by Chinese investors like FuWah [who recently bought the Park Hyatt Melbourne and are currently building the Park Hyatt Auckland]. The soft currency relative to the Chinese currency has helped, as has the corruption crack-down in China. “In New Zealand there has been very strong interest in the last 12 months, but there is a lack of investment grade stock, with no hotels available.” Chinese buyer Christopher Hur was at the conference. His company Host Hotels & Resorts is the largest hotel investor in the US and in the world. As vice president of acquisitions and development, Mr Hur commented on his company’s portfolio of New Zealand hotels. The New Zealand market over the past four years, he said, had continued to recover and grow. Host Hotels, nevertheless is looking to divest its portfolio of the Novotel and Ibis hotels in Ellerslie, but not elsewhere. “We are not selling our assets in Christchurch right now. We are still going to own five of the seven hotels in New Zealand and we are always looking for opportunities.” Investing in New Zealand, he said, was straight forward, with a stable government, transparency and ease of doing business – making it more attractive than other markets. Mr Hur added: “New Zealand is a beautiful country – the clean air, the space, the greenery – that is why Chinese like it down here. The country is very appealing and the investment returns have turned out quite well.” Asked about the standard of hotels in New Zealand, Mr Hur said: “To be honest, a lot of the products are a bit old. The main
Host Hotels & Resorts vice president of acquisitions and development Christopher Hur, being interviewed by master of ceremonies Nadine Chalmers- Ross.
ABOVE: Associate minister of tourism Paula Bennett. RIGHT: Tourism New Zealand chief executive Kevin Bowler.