Investors seek upscale, luxury opportunities in Australia

Marriott International has signed an agreement with Melbourne-based property developer Capital Alliance to introduce the AC Hotels by Marriott brand to Australia.
W Brisbane, Australia Image: Marriott International

Australia’s luxury hotel sector is booming, with notable new properties open, under construction or under consideration. These include the Marriott International, the W Brisbane, the under-development W Sydney, the St Regis, Melbourne, and the proposed Ritz-Carlton at The Star casino in Sydney. Earlier this year, IHG and Watson Elite signed a deal to open the Hotel Indigo Sydney Central in 2021. 

“There has not been a lot of growth in the high-end market in Australia for at least 15 years, but the market has turned the corner and with rising demand it offers a value proposition for the operators,” Bruce Ryde, VP of luxury brand management for Marriott International Asia Pacific, told the Sydney Morning Herald at the opening of the W Brisbane. “We are relaunching the W brand back to Australia as our research has shown there is demand. It is a strong brand in Asia and as visitation rises from there to Australia, we see a market for the hotels.”

Ryde said that Marriott is looking to enter what others may see as difficult cities, and referenced the Ritz-Carlton in Perth. “There may be some short-term fluctuations as supply comes on, but as inbound tourism from China to Australia increases, luxury hotels can be sustained,” he said.

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As noted yesterday, groups such as AccorHotels, IHG and Marriott International are among the top hotel groups making acquisitions of existing hotels with mid-tier international operators such as Prince Hotels and Minor Hotels Group, also partaking in acquisitions of established hotel brands to expand their portfolios.