25/07/2019 - 13:19

Hilton rollout reaching the regions

25/07/2019 - 13:19

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One of the world’s largest hotel groups is injecting new life into regional holiday destinations by rolling out three new hotels across WA.

The Karratha Hilton Garden Inn has been designed to make an eye catching impact on the town’s main street. Image: Pacifica Developments

One of the world’s largest hotel groups is injecting new life into regional holiday destinations by rolling out three new hotels across WA.

International hotelier Hilton is rapidly building a portfolio of hotels in regional Western Australia, with new properties expected to open in Kalgoorlie-Boulder, Karratha, and Busselton by the end of next year.

The hotels, which comprise Hilton Garden Inn properties in Karratha and Busselton, and a DoubleTree by Hilton at Kalgoorlie Golf Course, are being developed by Queensland-based Pacifica Developments, which is investing between $65 million and $70 million on the three projects.

Pacifica Developments director John Zendler told Business News the developments would be complementary to new infrastructure rolled out under the state government’s Royalties for Regions initiative.

“Royalties for Regions delivered some pretty cool infrastructure, but the hotel stock didn’t match it,” Mr Zendler said.

“Karratha is a wonderful town now, but hasn’t got a hospitality offering that matches the balance of the infrastructure on offer in the town.

“At Busselton, we’re down on the foreshore, and they’ve done a wonderful job on the redevelopment of that foreshore but it needs something that’s more commensurate to what they’ve done.

“The third one is out at Kalgoorlie on the golf course, which is another great initiative between the state and the city.

“Because it’s on the golf course we’ve gone a little bit more resort-style so it’s a Hilton DoubleTree – we certainly see the opportunity to induce some demand via golfing tourism and functions and events, and even a form of escapism for the locals.”

All proposals have support from respective local government authorities and are at various stages in the planning process, with a development application out for public comment in Karratha, and plans expected to be lodged for approval in Kalgoorlie and Busselton in coming weeks.

The projects add to Hilton’s recent WA push, which includes the recently opened DoubleTree by Hilton Northbridge, another under construction at Barrack Square, and a Hilton Garden Inn Albany, which Pindan recently started building on behalf of a local landowner.

Hilton is in the process of establishing a dedicated WA team to manage its rapidly growing portfolio.

“It’s not for me to speak on their behalf, but I think Hilton has seen the opportunity to get a really good strong foothold and create some scale here,” Mr Zendler said.

“They will go from one asset to half a dozen open by the end of next year, which is more than enough for them to justify having a dedicated WA team and have a really strong presence around regional WA.

“A lot of these towns can probably take one internationally branded hotel, but probably not two, so it probably gives Hilton an opportunity to monopolise that regional hotel space.”

Even with Hilton’s appetite to operate hotels in WA, however, Mr Zendler described the process to secure the international group as a journey.

“Most hotel groups, just like every industry, have their data that they rely upon to see how regions are performing in terms of occupancy and trading,” he said.

“That data doesn’t exist in the regions, so we had to work with them and engage third-party property groups to go and do research in these towns to show what’s happening with the airports and other infrastructure, tourist numbers and so forth.

“We had to draw data from different sources to tell the story, but when we did get that done it put forward a pretty compelling argument that in these regional towns, certainly the ones that we are going into, that there is a good strong level of demand.

“Our research shows that if you bring a new, internationally branded hotel into the region it will induce some new demand that may not exist.”

Mr Zendler said Pacifica had engaged with construction contractors in each city but would not finalise build contracts until development approvals were in place.

“An important part of the projects for us is the fact that a hotel becomes part of the fabric of the town,” he said.

“From a developer’s point of view, this is a build-and-hold asset class for us, so it’s important to be part of the town, and that means embracing the local trade base when you get there.

“It’s not a residential play where things are built and sold and you move out of town.

“You’re there for the long haul, so you have got to look at the town as a co-contributor and support them as best you can to provide opportunities for local trades.”

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