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May 18, 2015

Adelaide Gets New Hotels as Business Events Increase

The massive investment in infrastructure along the Riverbank precinct in the central business district of Adelaide, Australia, seems poised to pay off for the city, with news of three new hotel builds announced in as many weeks.
In late April, Accor announced it will commence construction in 2017 of a $140 million five-star Sofitel-branded property on Currie Street, two blocks away from the Adelaide Convention Centre. The hotel is expected to open in late 2018 opening  The 32-story building will be the state’s tallest mixed-use development, with the top eight levels to have 80 apartments, while the remaining floors will contain the hotel’s 250 rooms. In a statement, Accor Pacific chief operating officer Simon McGrath told the Adelaide Advertiser that the new building would further elevate Adelaide’s international profile. “It is almost 30 years since a hotel of this status and quality has been built in Adelaide’s CBD," he said, "and it will help attract significant increases in tourism, business travel and conferences to the city,”

One week later, IHG announced plans to open Adelaide’s first Holiday Inn Express – also due for completion in 2018. The mid-priced 245-room property being developed by Dubai-based Pro-invest Group will be located one block from the Riverbank precinct and close to the city’s major shopping mall.

The Lester Hotel build was announced just a week after the Holiday Inn Express. The $50 million hotel property is part of a $150 million mixed-use development including two office towers and 5,000 square meters of retail space. Due to open in September 2016, it will be operated by hoteliers Jan and Peter Clark’s Lancemore Group under a franchise agreement with Choice Hotels top of the range Ascend brand.    

“We see significant upside in Adelaide,” Choice Hotels Australasia CEO Trent Fraser told the Australian Financial Review, “especially at the higher end of the market, where we don't have anything in that segment. We like the calendar of events and activities that Adelaide has and think it’s a really good opportunity for growth.”

In a big boost for Australia's off-site and prefabrication sector, the 240-room hotel will be manufactured in China and shipped over to Adelaide in modules to be assembled in a project taking just one year.  

The Lester Hotel site is on Adelaide’s north western corner – directly opposite the new $3 billion Health and Bo-Medical precinct housing facilities such as the new Royal Adelaide Hospital (open 2016) and the SA Health and Medical Research Institute (SAHMRI) opened 2014. The precinct will, upon completion, be the largest hub of its type in the Southern Hemisphere. 

The number of hotel rooms in Adelaide has grown by more than 25 percent since 2010 to now top 8,000 with four new properties opening in the Adelaide CBD in the past 12 months. The Adelaide Casino has also announced plans to include a luxury hotel as part of its redevelopment linked to the Riverbank precinct.

Hotels opened in 2014 in Adelaide include The Ibis Hotel with 311 rooms, The Mayfair Hotel with 170 rooms and two Quest serviced apartment properties with a combined 217 rooms. 

“Occupancy rates are increasing thanks to a number of elements," Adelaide Convention Bureau CEO Damien Kitto said in a statement, "including more direct flights into Adelaide and the 2014 opening of the $535 million Adelaide Oval stadium upgrade bringing AFL games and major events into the city. For instance, hotel occupancy rates in the traditional quieter winter month of June 2014 increased by 6.6 percent over the previous year. In saying this, Adelaide still represents great value for the business traveler when compared to other destinations.

“Overall occupancy rates were around 80 percent last year while revenue per room grew by 5.5 percent. With the first stage of the $400 million Adelaide Convention Centre redevelopment now open and the final stages to be completed by 2017 plus the $3 billion Bio-medical precinct which will open across the coming years, the time is now for South Australia as is evidenced by this investment and confidence by the hotel sector,” he said.

The Adelaide Convention Bureau announced a record $144.2 million of business won for calendar year 2014. This figure put the ROI to the State Government at 180:1 and saw almost 162,000 bed nights secured.

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