Will Holiday Inn bounce back faster than five-star hotels?
Head of international asset management at Pro-invest Group, Sabine Schaffer says that as the hotel industry recovers from the devastating effects of COVID, hotel investors will be rewarded with "decent returns" over the medium to long term.
Dr Schaffer told The Australian Financial Review, "COVID was a significant bump on the road with very negative consequences for many hotel operators.
"But I believe people will want to travel. It's not natural to stay in your two-bedroom apartment and be locked up.
"Look at somewhere like China, where the average hotel occupancy rate is now back in excess of 55 per cent and domestic airline traffic is back at 90 per cent."
Pro Invest Group raised $300 million for its second Australian Hospitality Opportunity Fund, including a significant equity investment from the Australian government's Clean Energy Finance Corporation.
This second fund is designed to drive the expansion of Pro-Invest's portfolio of Holiday Inn Express hotels in Australia and New Zealand.
The company has been developing these hotels since 2013, under an agreement with Intercontinental Hotels Group.
Four strategic sites have already been secured by Pro-invest.
This will see the development of almost 1000 rooms in Sydney, the Sunshine Coast and Auckland.
Ms Schaffer said the locations that were "carefully chosen for their demand drivers" would guarantee they bounce back faster than five-star hotels.
The groups $300 million fund raising was delayed by about nine months due to the pandemic and they also had to close a number of their hotels temporarily.
"We are starting to see things improve. Our Newcastle Holiday Inn Express was seeing occupancy at 55 per cent while at our other hotels it's around 30-40 per cent," Ms Schaffer said.
Irit Jackson, 29th October 2020
