'Fresh urgency' for hotel projects to finish up before 2026 Commonwealth Games

“As a result of the pandemic, we’ve already seen a huge uptick in interstate and local travel with people wanting to holiday closer to home,” said Raymond Mah, director at DKO Architecture, who specialises in both hotel and residential projects. “Before COVID, many of the big hotel brands were investing in the CBD.

“But now people’s attitudes have changed dramatically, and we’re seeing them all move towards the regions and coast instead. And in regional Victoria, all these projects have a fresh urgency as they must be ready for the Commonwealth Games in 2026.”

Mah’s firm has a number of new hotels now on their books, with three in an advanced state of development. One, Quest Traralgon, in the LaTrobe Valley and close to Morwell, where an athletes’ village is being planned, has just been approved unanimously by the local council.

It’s a 70-room, 5000-square-metre establishment next to the heritage-listed Ostler’s House and is next door to the well-known Ryan’s Hotel, with a public plaza to the front, to be constructed by BFN Developments.

Others include a 200-room, four-star hotel with a conference venue, and another 200-room, resort-style hotel and spa, both in Ballarat, which is also slated for an athletes’ village, and another major hotel development in Bendigo.

Melbourne is also benefitting from the rise in the popularity of local hotels, with Choice Hotels Asia Pacific just releasing its latest report on its third-quarter performance for revenue per available room across Australia and New Zealand.

It found that Australian figures were 45 per cent higher than in the same period in pre-pandemic 2019, with average daily rates up 26 per cent. Australian hotels within the group also outperformed the comparable market segment of room revenue by almost 30 per cent.

As a result, Choice has recently opened its fourth property with 1834 Hotels with Quality Apartments Melbourne Central, while a new 110-unit Adina Apartment Hotel Pentridge is about to open in February.

Across Australia, nearly 6000 new hotel rooms are under development and scheduled to open in 2023, according to international data firm STR Global, nearly twice as many as opened in 2022.

Graeme Steverson, technical director of planning and mobility with financial services company WSP, says that this Commonwealth Games – Australia’s fifth – could see as many as 40,000 people travelling to each of the regional centres. As a result, there’s a critical need for more investment in accommodation, public transport, pathways, cycleways, public spaces and other infrastructure.

“From March, there’s only a three-year runway before the Games – while Brisbane currently has a 10-year runway for the 2032 Olympics – so much longer – and the government wants to invest and get a lot of legacy value out of it,” he said. “They need to get bang for their buck.

“They need to build new infrastructure and build on what’s existing and as quickly as they can. Investment in regional Victoria gained some momentum with COVID when people were fleeing the cities and going out to live in regional communities, and there’s now even more motivation to reinforce what’s been going on.

“You should be able to get everything in the regional centres that you have access to in the capital cities, and what’s happening in regional Victoria can now serve as a template for getting the rest of regional Australia up to speed.”

The Victorian government has estimated that the Games will contribute more than $3 billion to Victoria’s economy, creating more than 600 full-time equivalent jobs before the Games, 3,900 jobs during the Games and a further 3,000 jobs beyond the closing ceremony.

It’s pledged to invest heavily in community infrastructure, including housing and world-class sports facilities, to leave behind a legacy of affordable housing for the regions and modern sports infrastructure to attract future major events.

Mah says the burgeoning number of new hotel projects will play a major role in attracting visitors for the Games and beyond. “You can’t design a hotel just for a two-week event,” he said. “We are very much thinking about the future of those hotels and how they’ll be flexible to accommodate both short and long stays.