Chinese giant in hotel play

The Lounge Bar of the planned Greenland Primus Hotel in the Sydney CBD

The move is a significant shift for Chinese players in Australia, who initially tended to buy luxury hotels and resorts run by leading Western brands, such as the Park Hyatt in Melbourne and the Sheraton in Port Douglas.

They now plan to own and operate hotels and resorts directly, appealing to mainland Chinese tourists, with hopes of eventually winning over locals.

Greenland’s planned 171-room hotel, at the old Sydney Water headquarters at 339 Pitt Street, will be called the Greenland Primus Hotel and is expected to open in July next year. It will sit next to Greenland’s 66-storey luxury apartment tower, the tallest in Sydney.

The company is not shy in revealing its tourist credentials.

“Greenland certainly has an influence on Chinese tourism, more than anybody else, so it stands to service tourists from China to Sydney and Australia,” Greenland Australia managing director Sherwood Luo said.

Greenland hopes to capitalise on its global hotel business, which includes more than 60 hotels in 35 Chinese cities. Its two brands are Primus for boutique hotels and The Qube for business hotels.

It last year launched a 177-room Qube hotel in Frankfurt with its Spanish partner, Melia Hotels International.

It also has hotels in New York and Los Angeles.

Greenland’s Mr Luo is counting on the brand’s established reputation in China to capture the growing numbers of Chinese tourists to Australia. He said Greenland would look to open more hotels in Australia. “It could take some time to establish a brand name in Australia. But by providing the good service and facilities, the hotel will promote itself,” Mr Luo said.

“We will have the appropriate promoting through the tourism section, through different channels, and we believe this brand will be promoted in the next two years and our reputation will begin to grow.”

Greenland is planning a mixed-use development next to Flemington racecourse in Melbourne, but this will not include a hotel. The Australian revealed last month that Greenland was bidding for the multi-billion- dollar Queen’s Wharf urban regeneration precinct in the Brisbane CBD; the Queensland government requires the winning party to develop a six-star hotel. Mr Luo declined to comment on the bid.

Greenland also has hotels in China run by large operators, such as Marriott and InterContinental, but it had no plans to hire an outside hotelier in Australia, Mr Luo said. Australian-based architects Woods Bagot designed the hotel, which will retain many of the heritage aspects of the site.

Dransfield Hotels & Resorts managing director Dean Dransfield said it was common for a foreign hotel brand to operate its first Australian hotel itself rather than through a known operator. Adding a hotel to a mixed-use development was the best way for an offshore operator to be successful in Australia, he said.

“It’s a common approach for offshore parties seeking to establish a brand and also to retain some control as an operator,” Mr Dransfield said. “For anyone looking to get a foothold in Australian hotel operations, there is a need to acquire the first few hotels while you build some infrastructure and gain some market knowledge before you might look to manage other people’s hotels.”

Apart from Greenland, another large Chinese-backed group, White Horse Australia, is presently overhauling Lindeman Island Resort off the coast of Queensland.

Source:  The Australian - 15 March 2014