Hotel giant Peninsula Hotels eyes Sydney Harbour sites
Sydney and Melbourne are on the radar of one of the world’s most prestigious hospitality companies, Peninsula Hotels, but it is a question of finding a suitable site.
Peninsula Hotels managing director and chief executive Clement Kwok says the company has aspired to develop a hotel in Sydney for several years, but the site must be harbour-front, and the numbers must stack up.
“It is a question of finding a suitable location but at the same time making the economics work. Land is not cheap and we have to look at the relationship between room rates and what we can charge and the cost of labour,” Kwok told The Australian at the World Travel & Tourism Council conference in Bangkok.
Commercial Insights: Subscribe to receive the latest news and updates
“The economics of luxury hotels are never easy: they are expensive to build, generally you have a lot of new hotels (to contend with) and you have a lot of competition. You are fighting for room rates, and you have to look at the long term.
“If you look at the existing Peninsula Hotels around the world they are all in exceptional locations, we would have to find something that ideally would have a view of the Opera House and the Sydney Harbour Bridge.
“The Peninsula Group is focused on what we call major gateway cities around the world and Sydney is clearly an obvious candidate … We are not doing hotels in secondary cities.”
Established in 1928, Peninsula Hotels, which is controlled by the listed Hongkong & Shanghai Hotels Group, is currently developing hotels in Istanbul, Yangon and London.
As an owner and operator of 10 hotels in major cities including Hong Kong, Bangkok, Paris and Shanghai, Kwok says it makes a big difference to be “at the owners’ table”.
The Peninsula Group is focused on what we call major gateway cities around the world and Sydney is clearly an obvious candidate … We are not doing hotels in secondary cities
“At Peninsula we always have at least an ownership. We think it makes a big difference at the owners’ table because we are making investment decisions and specifying things that may not be justified in the short term but we believe will sustain quality over the long term and will justify the investment decision.”
Kwok says much value has been created at the Hong Kong Peninsula Hotel because of the company’s long-term ownership of the landmark property.
Peninsula either develops hotels from the ground up or, as in the case of the Yangon, Paris and Istanbul properties, it restored heritage buildings, he says.
The writer travelled to Bangkok as a guest of WTTC.
This article originally appeared on www.theaustralian.com.au/property.