Boutique hotels the smart play: developer
Fresh from a six-year stint running the local development arm of US hotel giant Marriott International, lawyer Andrew Taylor is turning his attention to the development of boutique hotels, saying they are better earners than the big cookie-cutter models.
“There’s a demand for boutique hotels which are strongly connected to local neighbourhoods and strong food and beverage,” says Taylor, founder of Cre8tive Property, which will focus on finding sites in Sydney, Melbourne and Auckland and delivering boutique hotels.
“There’s a global phenomenon for boutique hotels. The big brands know the customer is looking for an independent and unique product reflecting the local urban area. They are aware of it and they are trying to wrestle with it.”
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Taylor foreshadows there will be more boutique hotels developed in Sydney and Melbourne because they make good economic sense, commanding room rate premiums of 10-20% above average hotels.
“And the food and beverage spend as well as the use of onsite facilities such as business facilities is much higher in a boutique hotel,” he says.
Taylor says the food and beverage spend in the Old Clare Hotel, which recently opened in Sydney, is “phenomenal’’.
The Chinese visitors want fringe locations. They don’t want the harbour; they want more authentic experiences
Since leaving Marriott following its acquisition of Starwood, Taylor has attracted a number of clients including a well capitalised US-based private equity firm with a strong appetite for exposure to the Australian hotel market.
In Sydney’s Kings Cross, Taylor says many hotels have dropped out of the suburb and it is now ready for a new wave of product that will include the opening of the 20-suite Spicers at nearby Potts Point on June 30.
Apart from Kings Cross, he said Surry Hills, Redfern and the eastern suburbs were also crying out for more boutique product.
In Melbourne, Fitzroy, Collingwood, Carlton and the ring around Melbourne’s north are also calling for more boutique product, which will appeal to leisure and business travellers.
“When people are here in Sydney for a weekend they don’t want to be in the CBD for the weekend,” Taylor says.
“The Chinese visitors want fringe locations. They don’t want the harbour; they want more authentic experiences.’’
Latest STR research shows that the vast majority of new hotels coming on stream in the nation’s capital cities are independent or non-branded.
Successful boutique hotels include The Old Clare Hotel in Sydney and HotelHotel in Canberra.
This article originally appeared on www.theaustralian.com.au/property.
