OVERCOMING challenges relating to infrastructure investment and development is a top priority for the state’s accommodation providers.
OVERCOMING challenges relating to infrastructure investment and development is a top priority for the state’s accommodation providers.
At a recent WA Business News boardroom forum, industry leaders said government processes surrounding local and foreign investment in accommodation facilities, and the viability of these metropolitan and regional projects generally, continued to stymie the tourism industry.
Australian Hotels Association executive director Bradley Woods believes the state government’s commitment to the mining and resources sectors needs to be replicated for the tourism industry.
“We are a ‘can do’ state now in terms of resource development, that’s been demonstrated in the last 12 months and we are seeing approvals,” Mr Woods said.
“When it comes to tourism and hotel development we are yet to see that happen and we are yet to see a strong level of commitment in terms of a political commitment for that occurring.”
In April 2009, Perth topped the annual Deloitte Hotel Occupancy Global Ranking index for the second successive year, concurrently cementing its position as the number one performer in worldwide hotel occupancy rates and highlighting demand for rooms locally with an occupancy rate of 82.4 per cent for 2008.
In contrast to this, Mr Woods said WA suffered a 15 per cent drop in hotel accommodation occupancy due to the global economic downturn (as compared to a 30 per cent drop in the eastern states), although he strongly believes that five-star hotel projects on Rottnest Island and in the CBD should be progressed.
Esplanade Hotels Group managing director Marylyn New said stagnant growth in average room rates in her hotels, equating to marginal profits, may weaken potential investors’ perception of Perth as an investment destination.
“My hotel’s average room rate was $96 in November 1991; it’s $141 today, so it hasn’t even doubled in 18 years,” she said.
“I can’t afford to build a new hotel with those rates and so while people say ‘build hotels’, in reality it’s impossible.”
Mr Woods said a tourism policy that streamlined regulation, red tape and approvals processes also needed to encourage investment across the board.
“The investment structure has to be right so that investors ... have the right investment climate to ensure they get a return,” he said.
“The viability has got to be there for the investment to be justified.”
Tourism WA chairperson and head of Lamont’s winery and restaurant, Kate Lamont, supports infrastructure investment, especially for the burgeoning nature-based or eco tourism market, which she believes is one of the state’s biggest advantages.
“We really need to invest in infrastructure, both the private sector and the public purse, in eco tourism,” Ms Lamont said.
“And we need to get very serious and committed to that and stop fiddling about at the edges.”
It’s an outlook supported by Australian Tourism Export Council WA chair Margaret Wilson.
“I don’t believe we need the big five-star hotels; I think we need the eco beach-style hotels working with our environment,” Ms Wilson said.
The proposed redevelopment of the Old Treasury buildings in Perth’s CBD into a five-star hotel epitomises the problems being faced by industry.
In February, after years of debate and delays, the state government announced that Mirvac/Cbus Property were the preferred proponent for the project.
However, Housing and Works Minister Troy Buswell said the government was only prepared to talk to the proponent about finding a development model that would not require a major financial contribution from the government.
Australia’s North West chairman Ian Laurance said the development should be fast-tracked.
“It’s 12 years since Mirvac were given the right to develop it, but they (the state government) put such tough conditions on it that they (Mirvac) didn’t go ahead and do it,” he said.
“To redevelop that with heritage values is going to be an enormous amount of money, so why doesn’t the government do that and then say, ‘we’ve done the heritage part, you build the hotel on top of it’.”
Mr Woods said the Old Treasury hotel development needed critical government investment to start the process.
“The government has to spend $60, $70, $80 million to get it up to a state that its able to be occupied,” he said.
