Shortage drives up value of hotel rooms
Sydney hotel values have gone through the roof.
The undersupply of hotel rooms with so many converted into apartments has created a shortage of tourist accommodation throughout the city.
Add to that the surge in overseas tourism from China, the US, the UK, south-east Asia, Korea and the UAE, and domestic corporate travel combined with pressure from the new $1.5 billion International Convention Centre (ICC) with its 8000 seating capacity.
As a result, hotel rooms in the Park Hyatt Sydney, nestled in the harbour between the bridge and the Opera House, have gone through through the $1.5 million value barrier.
The bottom line is this: a room at the Park Hyatt is now estimated to be worth well over the sum that could buy any decent-sized three-bedroom house in most parts of Sydney.
Other expensive hotel rooms are at the 414-room Westin Sydney on Pitt Street – where each room costs $1 million - the 416 room Sheraton on the Park - $830,000 per room – and the 577 room Hilton Sydney at $766,000 per room.
"It's hard to say exactly how much each room is worth because, as well as the overall value of the building and the number of rooms, we need to know what a hotel is making in terms of profit and the facilities," Peter Harper, executive vice-president at Jones Lang LaSalle Hotels & Hospitality group, responsible for hotel investment sales told the Sydney Morning Herald.
"But the prices in Sydney per hotel room have gone up considerably over the past couple of years. It's a complicated calculation, but rooms at the Park Hyatt would now be worth considerably more than $1.5 million."
This could be good news for some of the overseas owners of rooms in Sydney including the Abu Dhabi Investment Authority (ADIA), Meriton Serviced Apartments, China-based developer Greenland which own the Primus Hotel and the Nanshan Group, Chinese insurer Sunshine and Chinese property and hotel group Dalian Wanda.
It might also explain why the Park Hyatt was named the Sydney Deluxe Hotel of the Year at the 2016 Tourism Accommodation Australia (NSW) Awards for Excellence.
by Leon Gettler, January 23rd 2017
