Savills says global hotel brands are circling Adelaide amid a tourism recovery

The world’s largest hotel brands are circling Adelaide amid a nation-leading revival that has broken occupancy records.

The world’s largest hotel operators are circling Adelaide for opportunities to establish new brands in the city amid a nation-leading hotel revival that has broken occupancy records.

In a new report, Savills has identified Adelaide as leading the recovery of Australian hotels, with average occupancy for the nine months to September of 69.4 per cent the highest on the mainland.

Revenue per available room, or RevPAR - a commonly used performance measure - was up 46.5 per cent, and in the last week of September occupancy hit 84 per cent - the best weekly average since the start of the pandemic.

It included a new record for the number of hotel rooms occupied in the CBD on a single night, with 9001 of the city’s 9911 rooms filled on September 27.

Savills director Rob Williamson said the figures underpinned the confidence of international hotel operators in the Adelaide market.

An industry veteran with more than three decades’ experience, Mr Williamson said interest in Adelaide had reached a level previously unseen during his time in the industry.

The owners of the Sofitel Adelaide are in talks to sell the hotel.

“Even before Covid-19 tenders had become very competitive between the brands, and aggressive,” he said

“I would normally run maybe two operator invitations every 10 years in Adelaide. I’ve run 30-odd in the last three to four years and we’ve had multiple submissions on every single one - sometimes as many as 11 and 12 submissions.

“Let’s not forget that there are many really good brands that still have not secured a single brand locality in Adelaide or South Australia, and these are some of the biggest brands in the world. There’s a real appetite and it is a competitive market.”

In its quarterly hotel market overview, Savills says there are just 528 rooms under construction in the Adelaide CBD, including the Vibe Hotel on Flinders St, TRYP by Wyndham on Pulteney St and Greaton’s Marriott development at the GPO site.

Mr Williamson is currently involved in several other hotel proposals, including a new tower planned behind Freemasons Hall on North Tce, the King’s Head hotel development on King William St and Wyndham’s plans for a flagship 353-key hotel on the corner of King William and Currie streets.

Artist's impressions of Greaton’s GPO hotel development which is under construction.

As developers work with hotel operators to make those projects stack up, Mr Williamson said there was still a shortage of quality accommodation in Adelaide.

“We’ve got projects that have recently opened or about to open but they’re not big projects,” he said.

“They’re good for Adelaide because they’ll be really experience-based hotels, but in terms of mega hotels, 200 rooms-plus, the jury’s out a little bit on the current developments.

“We’ve got several projects on the radar but they haven’t really moved to a point where you can say they’re definitely going to happen.

“The other thing is a lot of our primary stock is aged and not upgraded, and there has been demand across all of the brands to have product that meets expectations.”

Savills says the recovery of Australian hotels is also generating renewed interest from investors, who are predicted to splash out $2.5bn on Australian hotel acquisitions for the full year to December.

In Adelaide, the owners of the Sofitel are closing in on a sale of their new Currie St hotel, while Savills is also looking for buyers to take over Alto Adelaide’s proposed hotel development on Franklin St.

Meanwhile expressions of interest in acquiring 46 apartments in The Rowlands building off Grote St closed last week, pitched as an opportunity to convert the accommodation into a hotel.