By Cara Waters
While Melbourne was in lockdown, developers were busy building new luxury hotels. But whether there are enough guests to fill the glut of new rooms remains to be seen, with hotel occupancy still tracking well below pre-pandemic levels.
The latest luxury addition to the city’s hotel sector – the $100 million Le Meridien hotel – opened on Thursday, with a free flowing French champagne tower and the unveiling of an 18-metre heated rooftop swimming pool overlooking Parliament House.
The new Le Meridien hotel on the site of the former Palace Theatre in Bourke Street opened on Thursday.Credit: Luis Enrique Ascui
The 253 room hotel was constructed following the controversial demolition of the interior of what was formerly the Palace Theatre, including its marble staircase and sweeping viewing balconies, in 2020.
Prior to the demolition, there was a seven-year battle to save the popular live music venue with the destruction of the interiors of the 108-year-old building described as “morally outrageous”. The art deco facade of the historic building was retained.
Le Meridien will be joined by the “six star” Ritz-Carlton hotel, set to open next week. But the luxury hotel room boom comes as the latest figures from hospitality analytics company STR show hotel occupancy rates of 67.7 per cent for Melbourne in December – 14.3 per cent below 2019 levels.
Inside Melbourne’s Le Meridien hotel which opened on Thursday. Credit: Luise Enrique Ascui
Despite this lack of demand, prices have reached record levels with Melbourne’s hotel industry recording its highest monthly average daily rate on record of $236.5 – a 27 per cent increase on pre-pandemic figures.
A room at Le Meridien is even more costly with entry-level rooms at the hotel starting at $400 a night, while the top suite is around $4000 a night.
Le Meridien general manager Peter Minatsis said there was room for new hotels in Melbourne, especially if they were “quality”.
“I think all this new product coming to stage will really set Melbourne as an international city,” he said. “We’re almost sold out for Formula One already and that’s only two weeks away, so it’s looking really strong.”
Minatis said there had been “exceptional” interest in the Le Meridien brand.
“Our weekend bookings are already very, very strong even in some of quieter months so through Easter and April, we’re already seeing some great pickup through for those weekend periods,” he said. “But the weekdays – the Mondays and Fridays where the corporate travel isn’t as strong at the moment – it’s still coming back.”
Minatis said he had not experienced any backlash against the luxury hotel opening from Melburnians who were upset about the demolition of the building’s historic interiors and the loss of a live music venue in the city.
“There are of course some people who of course wanted it to be maintained as The Metro, but there’s been so much excitement and that many people who want to just see what it’s become,” he said. “I think there’s more excitement than anything.”
Lord Mayor Sally Capp said even pre COVID the City of Melbourne was looking at the pipeline of hotels coming online in Melbourne and knew that there would be pressure to create events and experiences to attract people to Melbourne.
“I think post pandemic we’ll take all the hotels rooms we can get,” she said.
“We really want to pick up that challenge of ensuring that we continue to do everything we can to attract people to Melbourne.”
Capp said she wanted to see more corporate visitors and more local, interstate and international tourists.
“I would love to see airlines with more planes bringing more people to Melbourne,” she said.
Inside one of Le Meridien’s luxury suites. Credit: Luis Enrique Ascui
Arrival figures for Melbourne Airport are still only at 81 per cent for the same month in 2019 with the latest figures showing a total of 2,312,697 travellers passed through the terminals in February, down from the 2,867,243 passengers processed in the same month in 2019.
Capp said she was excited to see Le Meridien open, even though many councillors and music industry figures lamented the demolition of the historic interiors of the building when it occurred.
“I think one of the particular things about this location is that it’s been dormant for a long time now,” she said.
“Council actually wanted to have it retained as a live music or entertainment venue of some sort when that debate happened... but the delivery today of this fantastic hotel is a significant assistance in transforming this top end of Bourke Street.”
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