COVID-19 puts major Adelaide hotel projects in limbo
Major hotel projects across Adelaide worth close to $1 billion are in limbo following the COVID-19 outbreak, but developers say they’re committed to building once travel restrictions ease.
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Major hotel developments worth close to $1 billion have been thrown into doubt amid the COVID-19 crisis, as developers face ongoing uncertainty around the resumption of domestic and international travel.
A five-star, $200m Westin hotel, which was expected to transform the GPO site, is among a dozen delayed CBD projects in limbo following the COVID-19 outbreak, with its developer putting a building application on hold in May.
A survey of the Adelaide City Council’s development register reveals developers of the $180m SIXTY2CURRIE tower on Currie Street and the $48m Travelodge project on Bentham Street have secured extensions to their development approvals since the COVID-19 outbreak, giving them another year to commence major work on the projects.
Construction of four other hotels including the $40m Vibe project on Flinders Street and the $35m TRYP by Wyndham on Pulteney Street were expected to start this year but have yet to break ground.
Developers behind a new $160m Hyatt hotel on Pirie Street are seeking approval for new designs after confirming the COVID-19 crisis had forced a delay to construction which had been expected to start next year.
Meanwhile, six major hotel projects in the CBD are nearing completion, including the Crowne Plaza on Frome Street. However its opening has been delayed from September to November following heightened travel restrictions for visitors from Victoria.
Axiom Properties general manager Paul Rouvray, who is overseeing the SIXTY2CURRIE project, said the company was still committed to the development.
“We just need to sit back and see what’s going to happen with the virus,” he said.
“Clearly it’s had a big impact on hospitality and accommodation, but we’re very committed to it in the long term.
“It’s going to be a great project - we’re just not exactly sure when it will start.”
Mr Rouvray said QT Hotels, which had agreed to operate a hotel within the mixed-use building, was still “very keen” to be part of the project.
The developers of four other major projects, including the Vibe and TRYP by Wyndham developments, offered similar commitments but declined to put a time-frame on the commencement of construction.
Starfish Developments managing director Damon Nagel said his company was hopeful of securing planning approval for a 16-storey hotel on Wright Street by the end of the month, but wouldn’t start work until there was certainty around future travel conditions.
“We’re getting there but the planning process has slowed down because of COVID,” he said.
“Once we’ve got approval I’ll sit down with the operator - we really probably should be coming out (opening the hotel) six months after restrictions are lifted.
“They (hotel operator) do a lot of corporate and government work so they’re not as reliant on international travel but it would still help.
“If COVID goes to version 3.0 or 4.0 then there might be delays but we’re confident in the hotel market and we’ll still be delivering a hotel unless something fundamental changes.”
It’s a different story for Starfish’s plans to transform Port Adelaide’s tallest building into a boutique hotel, with the developer expected to name its chosen operator shortly ahead of construction early next year.
“It (COVID-19) has not changed timing at all and it’s still full steam ahead at Port Adelaide,” he said.
“With things like the submarines we’re probably operating under a slightly different dynamic there.
“And in fact we’ve gone from 100 rooms and we’re putting another 50 rooms so we’re actually increasing the number of rooms.”