Sydney W Hotel sets new industry benchmark as high as its infinity pool

“The only way these deals now stack up is if we can drive premium revenue per room over the market and what the market is telling us is they want a brand that is modern and inclusive. And it’s about sustainability. This building has got a lot of sustainability elements.”

One initiative is W Sydney’s partnership with Genesis motors, offering state-of-the-art electrified GV70 and GV60 vehicles for VIP pick-ups, special guest drives and staycation loans. There are also EV chargers at the hotel, encouraging environmentally respectful journeys to and from the hotel precinct.

The opening comes as Sydney’s hotel market is front-running the performance of the sector nationally, boasting occupancy above 75 per cent, an average daily rate above $300 and revenue per available room above $200, according to STR and Colliers.

Colliers’ head of hotel transactions Karen Wales said hotels were emerging as a preferred property investment sector, as new market entrants were drawn to conditions of easing supply, high room rates and the return of international travel.

Sydney W Hotel sets new industry benchmark as high as its infinity pool

Guests pose for a selfie in the infinity pool on 29.Credit: Philippa Coates

Luxury and upscale hotels outperformed all other classes with a national average occupancy level of 70 per cent and room rate of $326, which represents growth of 59.5 per cent compared to the prior year, according to the Australian Accommodation Monitor.

This highlights the underlying strength of the sector and its reliance on a large domestic tourism base.

“While Luxury resorts are performing strongly amid the resurgence of leisure travel and desire for experiences post pandemic, we expect capital values for the broader Australian hotels market to also remain competitive compared to global peers, as international travel and revenue defends against economic fluctuations,” Wales said.

But Hunt reiterated that more airline slots were needed into Australia to help drive the tourism recovery.

“We now need additional airline slots and to play its part, the federal government needs to welcome additional carriers to this country,” Hunt said. “We need to get a competitive landscape in the hotel space.”

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Colliers’ national director of hotel asset management Neil Scanlan said many of the new market entrants were partnering with known hotel fund and asset managers.

He said it was imperative for hotel operators to realise revenue gain in a market that has been impacted by a 20 per cent increase in hospitality wages since 2018 as well as the pressures to reduce carbon footprint and global events disrupting supply chains.

“Hotels need to recalibrate their modus operandi now to adapt to a fundamentally different operating environment and successfully navigate the course to uncover hotel ‘alpha’ or ‘excess’ return,” Scanlan said.

“Operators who don’t proactively align with the flight to quality, factoring in capital for asset upgrades and repositioning, while improving energy efficiency and overall operational costs, will find core issues can no longer be hidden behind the veil of strong surges in hotel room rates.”

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