AccorHotels has chosen Melbourne as its first Australian location for the Novotel and Ibis dual-brand hotel. The Novotel and Ibis Melbourne Little Lonsdale Street is scheduled to open in late 2018.
This is also the first time anywhere Accor is developing what AccorHotels Pacific COO Simon McGrath calls "a vertical integration" of the Ibis and Novotel brands. The Ibis half of the hotel will have 270 guestrooms in the lower part of the building while the Novotel half will have 213 suites in the upper portion. All other spaces will be shared, including the dining, fitness, meeting and event facilities.
This Melbourne CBD location's sky-high real estate allows for more upper floor space that neither Novotel nor Ibis might be able to fill consistently on their own. The high construction expenses and challenges with parking spots would have been difficult for Ibis and Novotel stakeholders to overcome themselves without enough capital for investment. “With development real estate in CBD locations becoming increasingly sparse and with construction costs soaring, it makes perfect sense to literally scale up," McGrath told Finder, in order to "maximize the investment across a number of brands and price points."
These dual-brand hotels have been beneficial to hotel chains and operators. They can cover high construction costs while driving revenue by opening the hotel up to multiple market segments and ADR categories.
New Castle Hotels & Resorts was one of the first companies to develop dual-brand hotels. One of the first 25 dual-branded hotels was New Castle’s Residence Inn/ Courtyard by Marriott Syracuse Downtown Armory Square, which opened in 2013.
Real Hospitality Group followed in 2016 with the Hilton Garden Inn/Homewood Suites by Hilton at Dolphin Mall in Miami, which was developed by Procacci Development. The hotel operator’s Courtyard/Residence Inn by Marriott dual-brand property in NYC is currently under development.