Developers bet on long-term tourism boom with new hotels

Despite this ramp-up in supply, strong domestic-led demand has lifted hotel occupancy rates and room rates across capital city and regional markets, according to analysts from research house STR.

“There’s been consistent growth – from economy to luxury – over the past 12 months, which is impressive given the injection of supply,” Matt Burke, regional director for the Pacific, Japan and South Asia at STR, told the annual AHICE conference on Wednesday.

In Brisbane, local developer Kokoda Property will bring IHG’s Kimpton’s lifestyle brand to the riverside suburb of Tenerife as part of a $1.5 billion mixed-use development that will include apartments, warehouse-style lofts, co-working spaces and retail.

Kokoda paid more than $100 million last year for the 17,612 square metre former industrial site at 17-27 Skyring Terrace and has submitted ambitious plans for 381 apartments across three towers.

In one of these towers overlooking the Brisbane River, Kokoda plans to open a 155-room Kimpton hotel, which will include a 200-seat restaurant, 618 square metres of event space, an infinity pool and an open-air bar.

Kokoda Property managing director Mark Stevens said the developer had been in town planning since October and hoped to finalise its development permit in the next three to four weeks.

Mr Stevens said the Tenerife site with 220 metres of water frontage and its own marina was a natural fit for a new lifestyle hotel.

He said he expected the Kimpton to match the success of hotels like the trendy Calile Hotel in Fortitude Valley.

Should Kokoda achieve a successful planning outcome, construction is expected to kick off in the first half of 2025, with the hotel due to open in 2028. It will be the second Kimpton in Australia alongside a hotel in Sydney operated by Pro-invest.

In Townsville, developers Alan George and Michael Graham are having a fresh go at bringing a Hilton hotel to the regional Queensland town after signing a deal with the American hotel giant.

After ditching plans for a more upmarket DoubleTree by Hilton a few years ago, the pair, who lead Focus Pacific Property Development, have signed a new agreement with Hilton to operate a 190-room Hilton Garden Inn.

The $60 million project next to the Queensland Country Bank stadium is due to be completed in 2026. Pre-fabricated modular construction will speed up the delivery time and reduce building costs.

“With construction costs continuing to place pressure on projects in the region, we have also taken a position to support the global trend in modular construction and will be working with a major international manufacturer to deliver all hotel rooms in a modular format.” Mr Graham said.

Further afield

In Launceston, Tasmania, local developer Red Panda Property is partnering with Accor on the building of a $45 million Pullman luxury hotel with 139 rooms, which is due to open in 2027.

Alongside these new builds, Shakespeare Property Group, which purchased the Woolstore 1888 hotel at Sydney’s Darling Harbour for about $55 million last month, has put the 324-room Pullman Cairns International and the adjoining Village Lane Retail Centre on the market after nine years of ownership.

Will pricing is confidential, industry sources suggested it could sell for more than $100 million.

Shakespeare Property Group, the real estate arm of Melbourne fund manager Prime Value, paid $75 million for the hotel and adjoining mall in 2015. The hotel underwent a $17 million refurbishment in 2021.

CBRE Hotels’ Michael Simpson, Wayne Bunz and Hayley Manvell are handling the sale.