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International tourism numbers tipped to jump
Lisa Allen
[Image: lisa_allen.png]
Property & Tourism Reporter
Sydney
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Japanese tourists Rina Nakanishi, Nanae Oba, Haruna Natsume and Yuki Oyobe shop in Cairns Picture: Anna Rogers Source: News Corp Australia
[b]International tourist arrivals are forecast to jump 5.9 per cent to 7.5 million this financial year and by a further 5.6 per cent to 7.9 million in 2016-17, pumping $140 billion into the economy by 2023-24, federal government research reveals.[/b]
Despite the predictions, Tourism Research Australia yesterday downwardly revised its 10-year growth forecasts to 4.1 per cent growth, or 10.6 million extra visitors, for the 10 years to 2024-2025 as the dollar continued to weaken against the US dollar.
Former Qantas chief economist Tony Webber, a member of Tourism Research Australia’s forecasting panel, said Australia’s share of the tourism pie was growing slightly below the world average of about 5 per cent.
“Our share of the global tourism industry has been fairly stable. Generally tourism worldwide grows at 5 per cent a year, about the same as aviation growth,” said Dr Webber, an associate professor at the University of Sydney Business School.
Dr Webber said yesterday that New Zealand and Chinese tourists were particularly enamoured with Australia’s tourism industry, but the Japanese, who flooded the Australian market in the 1980s and 90s, had largely turned their backs on the country.
“The Japanese have turfed us as a destination. Japanese have fads (and their) love affair with Australia has waned,” he said.
“Australia has become a really expensive destination ... (and) the general price levels (of land transport, restaurants and hotels) has risen quite sharply.
“Over the past decade or two we have had prices rising by 3 per cent a year, and there are many destinations where these people can tour that have not risen at the same pace ... that contributes to weakening tourism arrivals.”
Nevertheless, federal Tourism Minister Richard Colbeck said the multi-billion-dollar industry was on track to reach the Coalition government’s Tourism 2020 target of increasing overnight expenditure to between $115 billion and $140 billion.
“It is encouraging to see the total tourism spend is expected to grow by 3 per cent annually over the next 10 years, to reach $145.1bn by 2024-25,” Senator Colbeck said yesterday.
But domestic tourism growth is forecast to be less than the expected international tourism growth, according to Tourism Research Australia.
Domestic tourism will increase 3.5 per cent to 324 million in 2015-16 while the 10-year average annual growth rate is forecast at 2.8 per cent, with visitor nights expected to reach 413 million by 2024-25.
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No vacancy? It’s too expensive to clean hotel rooms on Sundays
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Australia’s biggest private owner of hotels in Melbourne, Sydney and the Hunter Valley, Jerry Schwartz, has cut back on cleaning services on Sundays. Picture: John Feder
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Most hotels cannot afford to clean their rooms or change bedsheets on a Sunday because of the excessive cost of penalty rates, in a growing trend that is leading to customers being turned away.
The Accommodation Association of Australia has urged the government to display greater leadership by fostering a mature debate on penalty rates and encouraged it to make a submission to the industrial umpire’s review of modern awards to buttress the case for change.
The association’s chief executive, Richard Munro, warned yesterday that the practice of holding over rooms for cleaning and maintenance until Monday morning had increased markedly in recent years and was now widespread across both large and small operators.
He said the trend meant customers were being turned away as a result of 11th-hour developments such as flight delays, with rooms too messy to be used.
“The fact is, we are busiest Monday to Friday, and so we have to get the rooms ready,” Mr Munro said. “But obviously labour costs are better on Monday to Friday than they are on Sunday. So essentially what we do is what’s called ‘hold over’ rooms. Holding over rooms means not cleaning them essentially on a Sunday.
“When I say not clean, we make sure there’s no perishables ... But as far as making beds, cleaning bathrooms, vacuuming, all those sorts of things, we leave them over to the Monday morning.”
“This practice has become more widespread ... It would be greater than 50 per cent. It has become more apparent with costs increasing every year, with minimum wages going up to the rates they are.”
Jerry Schwartz, Australia’s biggest private owner of hotels in Melbourne, Sydney and the NSW Hunter Valley, confirmed he cut back on cleaning services on Sundays to save on costs. “We reduce cleaning on Sundays depending on occupancies,” Dr Schwartz said. “If the hotel is full, we obviously have to clean the rooms. But we tend to clean on a Monday if we don’t have to have the rooms clean for a Sunday.”
Dr Schwartz said he used cleaners on Mondays because they cost at least double on Sundays. “It’s the same job done one day later and it costs half as much.”
The accommodation association’s push increases pressure on Employment Minister Michaelia Cash to take action on penalty rates after she indicated her preference not to make a government submission to the Fair Work Commission’s review of awards.
Bob East, the chief executive of Mantra, Australia’s second largest hotel group, said hoteliers would not use cleaners on Sundays if they didn’t have to.
“If we don’t need to clean your room on a Sunday night, we will get the cleaners in on Monday,” Mr East said. “This is because of penalty rates.”
The hospitality industry (general) award sets penalty rates at 175 per cent on Sundays for full, part-time and casual employees, meaning a level 2 room attendant receives $32.32 an hour, with the base rate Monday to Friday set at $18.47.
The accommodation association proposes that full-time, part-time and casual employees should receive a 150 per cent penalty on Sundays, reducing the hourly rate to $27.71. It argues that Saturday rates should remain unchanged at 125 per cent for full and part-time employees and 150 per cent for casuals.
The hospitality industry (general) award sets penalty rates at 250 per cent on public holidays and casuals receive a rate of 275 per cent or $50.79 an hour. The association is pushing for a 100 per cent reduction in the casual rate to $32.32 an hour.
In Melbourne, David Perry, chief executive of The Windsor Hotel, said he insisted on employing his own cleaners rather than outsourcing the work.
“We believe we need to keep the hotel clean 365 days a year,” the veteran hotelier said. “We roster cleaning staff on seven days a week.”
Mr Munro warned there were other knock-on effects arising from penalty rates, with hotel breakfast services being cancelled on Sunday mornings and important maintenance works often being deferred until Mondays.
Smaller operators in regional areas have been the hardest hit, with Mr Munro saying it was often a “line ball” call as to whether it was more economical to clean the rooms and make them available.
“Regional hotels in particular, they have pretty flat rates,” he said. “You see in some of the bigger city hotels, their rates are highly variable, similar to the airlines, whereas motels in regional areas, they are pretty flat.
“So when it comes to a Sunday, they would probably, a lot of them would just close ... Sunday has become a sort of black day for our industry. You really just can’t afford to run anything anymore.”
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Chinese boom drives hotel occupancies to record highs
NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/i/u/5/y/z/image.related.afrArticleLead.620x350.gks7nk.png/1446772057671.jpg[/img]Hotels continue to ride the wave of a boom in tourism, especially from China Tamara Voninski
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by Larry Schlesinger
Record numbers of Chinese visitors to Australia are driving up hotel occupancies and returns in Sydney and Melbourne to unprecedented levels, according to the latest hotel figures.
Global research firm STR Global said occupancies averaging nearly 88 per cent across Sydney and Melbourne hotels over the 12 months to September as visitor numbers to Australia hit a record 7.1 million, according to Tourism Research Australia.
Hotel returns are up seven per cent in Sydney, with an average daily room rate of $232 a night and up five per cent in Melbourne to $202 a night, according to STR Global.
Driving it all has been inbound tourism and in particular record number of visitors from China, with Tourism Research Australia forecasting a 22 per cent rise in Chinese visitors in 2014-15 reaching 928,000, or 13 per cent of the total international visitor market.
[img=620x0]http://www.afr.com/content/dam/images/g/k/s/b/o/x/image.imgtype.afrArticleInline.620x0.png/1446769078366.jpg[/img]Hotel occupancy in Sydney and Melbourne is at record levels
New Zealand remains Australia's biggest tourism market (18 per cent of all arrivals) but by 2020 the Kiwis will be surpassed by China with almost 1.5 million visitors.
By 2025, Australia will receive almost two million Chinese visitors annually, with overall visitor numbers to climb to 10.6 million, the forecasts show.
Surging occupancy and room rates are not just confined to the big five star hotels, the STR Global figures show, but have spread out to Sydney airport hotels and the mainly corporate hotels in Ryde and Parramatta.
"Sydney's hotel sub-markets are also experiencing unprecedented trading conditions," said commercial agents JLL.
JLL said increased airline capacity, a weakening Australian dollar and improved economic conditions of key inbound source markets were behind the surge in tourism. This is helping to rebalance the economy away from resources and as some of the heat comes out another economic driver, housing.
Melbourne and Sydney have been the primary beneficiaries, with Australian Bureau of Statistics figures showing over 60 per cent of overseas visitors spent the majority of their time in New South Wales and Victoria during the first 8 months to August 2015.
It's not just Chinese visitors which are coming to Australia in record numbers, but rising visitors from UK, United States, Singapore, South Korea and India.
Indian visitors numbers are forecast to double over the next 10 years reaching 405,000 annual arrivals.
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Chinese tourists outnumber Kiwis
- AAP
- NOVEMBER 09, 2015 3:11PM
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Chinese tourists take photos of the Sydney Harbour Bridge and Sydney Opera House from Mrs Macquaries Chair. Source: DailyTelegraph
[b]New Zealand may be the Rugby world champions, but China has snared the titled of the biggest source of visitors to Australia.[/b]
The number of visitor arrivals to Australia was 637,100 in September, up by 15,200 from August and by 62,900 from a year before, according to seasonally adjusted figures from the Australian Bureau of Statistics released today.
China, including Hong Kong, accounted for more than one third of the annual increase in arrivals, with a rise of 22,200.
That lifted the monthly total to 113,500, making China the biggest source of visitors to Australia for the first time.
That place had previously been held by the Kiwis, who now occupy second place with 110,000, up by 7700 over the past year.
An improving trend in travel, part of the economy’s “rebalancing” as the mining investment boom tapers off, has been dominated by the acceleration in arrivals of visiting foreigners.
The gap between arrivals and departures narrowed to 138,200 in September, down from 181,100 a year ago and 206,400 in September 2013.
But the improvement has been helped by slower growth in Australian resident departures since the Australian dollar topped out and started to drift lower in mid-2103, making overseas travel less of a bargain.
The number of Australians heading abroad fell 7300 in September to 775,300, to be up only 20,000 from 12 months before.
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Developers switch to hotels after Melbourne planning shock
[img=620x0]http://www.afr.com/content/dam/images/g/l/0/5/l/2/image.related.afrArticleLead.620x350.gkxbdr.png/1447660144746.jpg[/img]Struggle over the changing face of a city: Victorian Planning Minister Richard Wynne has tightened planning controls in central Melbourne.
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by Michael Bleby
Developers stung by September's overnight changes, which cut the density permitted on sites they owned in central Melbourne, are reworking their plans to develop hotels, rather than residential towers, on those sites.
BPM founder and director Jonathan Hallinan said his company always intended to develop hotels, but the changes that effectively cut the yield on sites had sped up his move.
"There is an undersupply of hotel rooms in Melbourne," Mr Hallinan told The Australian Financial Review. "One of the things we are looking at is how we can give what is required at the moment, in the hope of some leniency."
Melbourne needs rooms. Demand is likely to grow faster than new supply and the city's average occupancy rate is likely to tighten from 86.3 per cent in the first half of this year to 88.2 per cent by December 2017, Deloitte said in its latest Tourism and Hotel Outlook 2015 report.
[img=620x0]http://www.afr.com/content/dam/images/g/l/0/5/j/9/image.imgtype.afrArticleInline.620x0.png/1447653261501.jpg[/img]What it could all become: projected growth of Melbourne CBD by 2020. Victorian government
In the hotel-deficient Victorian capital, developers are already responding to the need. Last month Singaporean developer Well Smart Investment Holdings won approval to build a 478-room high-rise hotel on Little Lonsdale Street in the centre of Melbourne, after amending the original plans from a mixed-use development to a pure hotel project.
INTERIM CONTROLS HASTEN TREND
But the interim controls that state Planning Minister Richard Wynne introduced without notice in September are hastening that trend. Last week, hotel developer and operator Pro-invest paid $25 million for a development site in Southbank and head of development Tim Sherlock said the new rules would help hotel developers because their rooms were smaller and density controls affected them less.
Mr Hallinan said BPM was certainly going to be affected by the density controls, "but it's not to say that the plot is unworkable".
He declined to give details about the site on which he is collaborating with the landowner, but said they had changed gears and were planning a hotel for the site.
The state government is seeking a firmer hand in shaping the city's development after years of lax controls that allowed Melbourne – fuelled by local and overseas capital – to build apartments with four times the maximum density allowed in high-rise capitals such as Hong Kong, New York and Tokyo. It also seeks to rein in land speculation that sees developers "flip" sites with approvals for dense developments that may have little regard for their surrounding environment. Singaporean developer Chip Eng Seng doubled its money this way in March.
Not all developers with sites affected by the density rules are changing plans, however. Cbus Property's near-complete plans for its 6000-square-metre site on Collins Street – themselves a revision to an earlier plan that was knocked back – were thrown into uncertainty by the September announcement, but it has resubmitted plans with a request for an exemption from the controls.
EXEMPTIONS APPLIED FOR
Super fund ISPT has also applied for exemption from the rules for a planned tower at a site it owns at 271 Spring Street.
Developer Hume Partners Property, which owns a site at 55 Southbank Boulevard and had developed plans to build a 10-storey wooden extension on the existing office block, was also caught out by the snap change. The company declined to comment.
Mr Hallinan said the new rules could be worked around.
"With property, you can evolve with the challenge," he said. "When you're producing something that is needed, it's more likely to get leniency."
Separately, the planning department on Monday closed a loophole in Mr Wynne's regulations that threatened to draw a raft of existing applications into the new regime.
With Nick Lenaghan
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Hotel confidence plummets as offices sentiment surges
[img=620x0]http://www.afr.com/content/dam/images/g/k/f/4/b/6/image.related.afrArticleLead.620x350.gl1jzx.png/1447827017876.jpg[/img]The outlook for commercial property is bright, the latest NAB index shows. Brendan Esposito
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by Larry Schlesinger
Confidence in the central business district hotel market surprisingly tumbled in the third quarter of the year, as property professionals recalibrated expectations for capital growth, the latest NAB Commercial Property Survey shows.
The index shows hotels fell from a positive reading of 38 to zero over the third quarter, with capital values falling 2.8 per cent, based on a survey of 250 commercial property professionals.
But expectations for the office market rebounded, with the index rising from a reading of three to 20. Most of the rebound was in NSW and Victoria, resulting from rising business confidence and demand for more office space from sectors like professional services.
Overall sentiment about commercial property was down slightly, but is expected to rise strongly over the next two years.
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The weaker sentiment for hotels appears to be more a temporary blip than a sustained downturn, with the survey forecasting confidence about hotel returns to rise over the next two years.
NAB senior economist Robert De Iure said weaker sentiment about hotels had been driven by reduced expectations about capital growth, as well as "quite weak" hotel room returns (known in the industry as revenue per available room – revPAR) over the past two quarters.
BACK INTO THE PACK
"The feedback we got is that it's more a reaction to how strong hotels have been over the long term and that the sector is now coming back into the pack," Mr De Iure said.
[img=620x0]http://www.afr.com/content/dam/images/g/l/1/r/0/7/image.imgtype.afrArticleInline.620x0.png/1447810615491.jpg[/img]The outlook for commercial property is strong overall
"It does rebound over the next couple of years," he said.
Sean Hunt, regional vice-president at Starwood Hotels and Resorts, described the NAB findings as "entirely surprising" and not reflected in the performance of Starwood's suite of luxury hotels.
"Occupancies are running at 90 per cent across our city hotels. Our new hotels, Sheraton Melbourne and Four Points by Sheraton in Brisbane, made a profit in their first month of operation," Mr Hunt said. "Hotels are really in vogue."
The NAB report forecasts hotel capital values to fall 0.6 per cent over the next 12 months and then rise only 0.3 per cent over the 12 months to September 2017.
By comparison, office property capital values are forecast to rise more strongly over the same periods, at 1.5 per cent and 1.4 per cent respectively, as are industrial (1.1 per cent and 1.3 per cent) and retail (0.9 per cent and 1.2 per cent).
The strongest office market will be NSW, with values rising 3.5 per cent and 2.8 per cent respectively over the next two years, followed by Victoria, with values rising 1.3 per cent and 1.5 per cent. Victoria is forecast to have stronger office rental growth than NSW.
CONTINUE TO STRUGGLE
However, Queensland's office market will continue to struggle, with no pick up in capital values and only a modest rise in rents forecast.
Western Australia's office market, driven by the resources boom correction, will deteriorate further, with capital values forecast to fall 4.8 per cent and 3.3 per cent over the next two years and rents to fall steeply, including a 7.1 per cent plunge over the next 12 months.
"WA is still woeful," Mr De Iure said.
NAB chief economist Alan Oster said it was the first time the outlook for rents had been positive across all sectors – office, industrial and retail – since late 2010.
Retail and industrial rental growth expectations are strongest in NSW, followed by Queensland, and are weakest in Western Australia.
"The survey also points to an improvement in developer confidence this quarter, with the number of developers planning to start new work in the next six months rising to 60 per cent, up from 48 per cent in the second quarter.
"Hopefully, this will translate into stronger building construction, particularly as property developers have also noted a further deterioration in their debt and equity funding situations," Mr Oster said.
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Sam Chong to build five-star Westin Hotel on Brisbane’s Mary St
Lisa Allen
[Image: lisa_allen.png]
Property & Tourism Reporter
Sydney
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An artist’s impression of the Westin Hotel in Brisbane, expected to open in 2018. Source: Supplied
[b]Brisbane will soon sport a lavish five-star Westin Hotel, with Malaysian-born mining magnate Sam Chong pushing the button on a $325 million development in the city’s busy Mary Street.[/b]
The 286-room Westin Hotel is expected to open in 2018 as part of a mixed-use development called Mary Lane, which will also feature retail outlets, restaurants and opulent dwellings to be known as Westin Residences.
“Our vision is to create a legacy five-star hotel in the city of Brisbane,” said Mr Chong in a statement yesterday.
Starwood Hotels & Resorts vice-president Sean Hunt said the Brisbane Westin would adjoin another Starwood Property, the Four Points by Sheraton, which was developed by Mr Chong four years ago.
Mr Hunt said Starwood would not take an equity position in the development at 111 Mary Street, but it had struck a long-term management agreement. The hotel would be completed for the 2018 Commonwealth Games in southeast Queensland.
The 184 apartment owners could access the Westin Hotel’s venue and room service on a fee-for-service basis, he said, adding that buyer interest in the dwellings had been strong.
Apart from Westin Hotels in Sydney, Melbourne, Brisbane and Perth where one is under construction, Mr Hunt said he would like to expand the brand into other Australian capitals.
“We would look at some cities such as a Westin in Canberra, we would also look at second tier cities like Darwin,” he said.
Mr Hunt also wants to manage Westin Resorts in Queensland’s Sunshine Coast and Gold Coast.
Starwood has 27 hotels across the Australia and the Pacific with 19 operating and eight under construction.
Meanwhile, international tourist arrivals jumped 6.6 per cent to a record 6.6 million in 2014-2015 according to Tourism Research Australia’s State of the Industry 2015 report released yesterday.
International tourism expenditure also reached a new high of $33.4 billion in 2014-15 following growth of 10 per cent, which is the strongest expenditure recorded for a financial year since the Sydney Olympic Games in 2000.
Spending by Indian visitors grew 39 per cent shooting above $1bn for the first time, placing India as Australia’s fastest growing expenditure market in percentage terms with very strong growth experienced in the March 2015 quarter with Australia during the ICC cricket World Cup.
Australia’s domestic tourism is thriving with 83.2 million overnight trips were recorded last financial year, which is the highest on record.
Overnight visitor expenditure increased 4 per cent to a total of $55.7bn and total overnight expenditure increased 6.3 per cent to $88.8bn, said federal Tourism Minister Richard Colbeck.
During 2014-15, the value of the tourism investment pipeline increased by a net $4.3bn to $53.7bn in 2014.
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Five-star Australian hotels lack the extra service factor
The Australian hospitality industry comes up short in the high-end accommodation stakes.
[img=620x0]http://www.afr.com/content/dam/images/g/l/2/d/p/o/image.related.afrArticleLead.620x350.gku86k.png/1447899793516.jpg[/img]At the Peninsula Manila, Sonja Vodusek has organised for guests to have nightly baths filled with Evian water or goat's milk, and had the lobby orchestra play regular guests' favourite songs as they enter. Wayne Taylor
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by Jacquie Hayes
I sometimes feel a flurry of hope when a really sharp-looking hotel opens in Australia promising service levels and appointments exceeding previous expectations. So it was recently, when Perth's COMO The Treasury opened its doors offering that bit extra in an "elegant and restful base from which to explore the wilder lures of Western Australia".
But can it – and any other newbies – deliver? After all, Australia's hospitality industry doesn't have a particularly impressive track record at providing the standard of service high-end Australian travellers have come to expect after truly five-star stays offshore.
Guests would be happy to pay through the nose for that level of luxury but it's a common complaint that they just can't get it here, with hotel and restaurant staff equally guilty of either not caring, being too loquacious or simply lacking deference.
One very well-travelled American friend of mine has this view: "Whatever's considered the best hotel in Australia, it's a bad five-star. They call it five-star and they tick all the boxes but they don't actually follow through."
Ultimately, it's about delivering the experience, he says.
"The word is 'service' – to serve. Australians don't have that in their psyche," he says.
LOCALS SPEND BIG OVERSEAS
It's a view broadly shared among frustrated Australians who are more than prepared to spend big to seek it offshore.
To be fair, though, very few truly five-star brands have properties in this country, with the exceptions being Four Seasons and Langham. The Ritz-Carlton plans to open a property in Perth in 2018.
Meanwhile, everyone else is jostling to capture a larger share of the growing number and changing composition of international travellers taking advantage of our foundering currency. Tourists from greater China, for example, recently overtook New Zealanders travelling to Australia for the first time, according to a CommSec report.
"With Chinese tourism rising at 20 per cent [a year], further history-making days aren't far away," says CommSec's chief economist Craig James.
The Peninsula Hotels group knows a thing or two about customer service generally and what the Chinese want specifically. But it hasn't made its way Down Under yet. But it does capture a good number of our wealthy tourists at its 10 properties in other parts of the world. Australian travellers are among the top 5 per cent of guests at the group's Philippines property and in the top 3 per cent at Beverly Hills.
WOMEN RUN THE SHOW
It's been a smart strategy, apparently, for the group to assign so many of its general-manager roles to women – 40 per cent of its properties are run by them.
I caught up with one of them recently – Sonja Vodusek, MD of The Peninsula Manila – while she was in Melbourne as part of The Peninsula's annual roadshow designed to keep The Peninsula Hotels brand front of mind for Australia's high-end travellers.
Formerly of Yarrawonga, in north-east Victoria, Vodusek is about to move to The Peninsula Tokyo where she says she'll become the first-ever female managing director of a luxury hotel in not just the city but the whole of Japan.
It's a long way from her training at the Blue Mountains International Hotel Management School in Sydney, so I figured she'd have a good handle on what Australian hotels need to do to lift their game.
In her Manila hotel, she's organised for guests to have nightly baths filled with Evian water or goat's milk, and had the lobby orchestra play regular guests' favourite songs as they enter.
"We have a lot of high-expectation travellers because, in their lives, they have all the care factors – the butlers, the drivers – and when they come to a hotel, we have to provide that," Vodusek says.
SERVICE VERY CASUAL
While she loves coming home to Australia, she admits the service here is "very casual".
"A lot of people in the field are university students using hospitality as a conduit to other things," she says. "In Asia, it's their job, their life, their career. Service is a religion, it's innate, it's bred in them.
In the US, on the other hand, it can be considered a business – the more money you pay, the better service you get – and in Europe, it's a style thing.
"It's their profession, not a way to get to something else," she says.
Vodusek believes Australia's service model needs to improve to remain international, but it should still reflect our country, our lifestyle, our people.
"It can have attitude, but it's still refreshing," she says. "And you have to take the good with the bad."
But "training, training, training" is the only way to go.
"I think establishments really have to invest in their people, and the leaders really have to show them the way, walk the talk. It can have an immediate impact."
That's pretty well the approach taken at The Langham Melbourne where managing director Ben Sington✓ says his whole business is driven by service.
GUEST NEEDS STORED
"Basically, you build up a system, you create the culture then the staff go out and do it," Sington says. "That's how a top hotel delivers – through trained staff."
The Langham has a range of systems in place to make sure its service is top-notch and measurable.
"We train our staff to the world's highest hotel standard so Forbes, and companies that audit world hotels, can rate it," he says.
Reservation staff are trained to establish guest needs so their preferences can be delivered, with the information stored in the group's guest experience management system (GEMS) and shared with all Langham hotels so guest needs can be in place before they arrive.
"Our brand says we are trying to extend intuitive service with poise and luxury to build great memories. That's our mission, that's what we try to do."
Sington says there are few hotels in the country that can match what The Langham is doing.
"It's up to the brands whether they want to make money or whether they want to do service," he says. "Our philosophy is, you deliver the service, you make money. There is no compromise, we have to have quality no matter what happens."
Which sounds like a sensible approach wherever you are, even Perth. We'll watch with interest.
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Forget apartments, hotel rooms rule in Melbourne's laneways
[img=620x0]http://www.afr.com/content/dam/images/g/l/3/p/2/t/image.related.afrArticleLead.620x350.gl35td.png/1448008410426.jpg[/img]Artist's impression of a new boutique hotel planned for Tattersalls Lane in the centre of Melbourne.
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by Larry Schlesinger
Melbourne restaurateur Yin Choi Lam had originally planned to build nine levels of apartments down one of the city's iconic laneways. But with fears of an oversupply of inner city apartments abounding, while hotel rooms fill up, he is now seeking to develop a boutique hotel on the Tattersalls Lane site he owns.
The proposed 12 level hotel, designed by architects KUD, would replace the current approved plans for nine storeys of serviced apartments. In 2008, 18 levels of apartments were proposed on the site.
The 203 square metre site is currently home to Section 8, a popular outdoor Melbourne bar run out of two shipping containers. Lam paid $1 million for the site at auction in 2002.
The hotel, which has been provisionally called 27 Tatts, would comprise a restaurant across the ground and first floor, 60 hotel rooms on 10 floors above, topping out at 32 metres with a rooftop terrace overlooking the city.
[img=620x0]http://www.afr.com/content/dam/images/g/l/3/p/2/t/image.imgtype.afrArticleInline.620x0.png/1448008395223.jpg[/img]Artist's impression of a new boutique hotel planned for Tattersalls Lane in the centre of Melbourne.
Not far away, a Singaporean developer won approval in October for a 478 room high-rise hotel on Little Lonsdale Street after he amended the original plans from a mixed-use development to a pure hotel project.
SHIFT TO HOTELS
The shift towards short-stay accommodation, rather than residential apartments, on CBD development sites is becoming more prevalent as the tourism boom gains momentum and hotel occupancy rates head towards 90 per cent across Sydney and Melbourne, according to the latest figures from consultants STR Global.
"Historically hotels have never been the best solution when developing a block of land, but the tourism boom has tipped that on its head. Now the first and highest use is as a hotel," said Sean Hunt, regional vice president at Starwood Hotels and Resorts.
Last year Starwood opened the Sheraton Melbourne on the site of the former Naval and Military Club on Little Collins Street. Mr Hunt said the hotel was profitable within a month of opening.
"A whole new wave of investors and owners are coming and talking to us. They see a hotel as quite attractive not just on the yield but in terms of capital gain," he said.
The Tattersalls Lane development application notes the proposal has evolved "as a direct response to the changing forces in the economic market", with the benefits including a new accommodation offering that will contribute to the tourism industry in the Chinatown precinct.
A record 7.1 million overseas visitors came to Australia in the year to September, according to Austrade figures, with 60 per cent of international visitors choosing to holiday in either Victoria or NSW.
By 2025, it is expected that Australia will welcome 10.6 million overseas visitors every year, with total tourism spending (both overseas and domestic) rising from $108 billion to $145 billion.
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Country hotels lag city cousins in quest for tourist dollar
[img=650x0]http://cdn.newsapi.com.au/image/v1/f36f9fe6d8ebf77d19ec7f35d881c503?width=650[/img]
Martin Ferguson, Chairman of APPEA. Picture: David Moir
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City hotels are booming but the picture is different in country towns, which have been hammered by dropping hotel occupancies and room rates, coupled with a lack of government support.
As Sydney and Melbourne hotels report strong occupancies and room rates, Tourism Accommodation Australia data reveals regional hotel occupancies fell by 2.2 percentage points to 53.8 per cent in 2013-14 and regional room rates dropped nearly 3 per cent to $3.5 billion.
Jerry Schwartz, Australia’s largest private hotel owner, said: “I have invested in two regional hotels in NSW. The only way I can afford to keep them running is that I have my five hotels in Sydney which allows me to keep running the regional ones in the Hunter Valley and the Fairmont in the Blue Mountains.
“There is no government support, I see so much advertising for tourism to Hobart and New Zealand … you don’t see advertising for people to come to our regional areas, (even though) people are now much more hesitant to travel overseas.”
Dr Schwartz said the managers of his 315-room Crowne Plaza in the Hunter Valley, Intercontinental, were not optimistic about the resort delivering an increase in revenue per available room as well as room rates next year. “This is despite the fact I have put so much money into increasing facilities — some $8m — since I bought the hotel three years ago,” he said.
Former federal tourism and resources minister Martin Ferguson said much of the problem with regional tourism was the end of the resources boom.
“History will show from a tourism perspective obviously we get growth in our cities and key regional communities but it has always been difficult to actually get (tourists) to go that extra distance to Bendigo, Margaret River, the Blue Mountains, Katherine, Townsville or whatever,” said Mr Ferguson, chairman of Tourism Accommodation Australia.
Governments were not investing sufficiently in regional tourism areas, he said, adding that the Baird government was now well positioned to invest in tourism infrastructure in NSW due to the sale of its electricity grid.
“The problem for regional Australia is that during the resources boom many regions benefited from the travel and accommodation requirements of business and construction workers,” Mr Ferguson said. “It could be suggested that in some regions it was also too easy when the resources boom brought 100 per cent occupancy and very good tariffs.”
Mr Ferguson said mining states Western Australia and Queensland needed to transition from resources to the new economy. “There should be more of a focus on leisure tourism and that means refining product to be attractive,” he said.
Visitor arrivals from China, India, parts of Europe and Japan were good. “Aviation access into Australia is there, but we have to get holiday makers to disperse into the regions,” Mr Ferguson said. But he said the hotel pipeline in capital cities was strong.
“We have got very good investment in new (hotel) builds and refurbishments,” he said.
“You only have to look at Perth, Sydney, Brisbane, and Crown is talking about another hotel in Melbourne. We would have liked these hotels built a few years ago when there were 100 per cent occupancies.”
Tourism Accommodation Association chief executive Carol Giuseppi said focus and investment was needed in regional areas. “It’s about providing and encouraging more infrastructure and dispersal of international visitors,” she said.
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