Hilton executives have flagged Sydney and Melbourne as potential Australian destinations for the group’s top-shelf Conrad Hotels & Resorts brand; Auckland in New Zealand is another possible city in the region. However, Hilton’s ultra-luxury Waldorf Astoria is still quite some way from popping up in this region, says Alan Watts, Hilton’s President for Asia Pacific.
In Sydney this week to promote Hilton’s 100th anniversary, Watts told LATTE that, of the hotelier’s two deluxe offerings, Conrad would be the clearer choice in Australia, even though investors would likely pounce at the opportunity to invest in a local Waldorf Astoria.
“Everybody wants, from an owner’s perspective, a Waldorf Astoria. They want to do the pinnacle, but the reality is the build cost of those assets mean they need to get rates that are beyond the expectation of this market today.
“I would see a Conrad opportunity in Sydney as probably the most logical brand entry. I don’t see it as a Waldorf Astoria market unless it was a signature asset that had water and bridge views. I don’t think you can do true luxury in this market without that. It would be very difficult,” he said.
In Sydney from his Singapore HQ this week, Watts said the Queensland coast could potentially be a home for the Conrad Resort brand, “but there’s not a lot of space in that market. And the trouble with high-end resorts and projects in the north is [there’s] so much stock coming into Bali. There’s so much stock coming into Southeast Asia, and your source markets fly across those assets to get here.
“I would love to be able to do Great Barrier Reef-and-surround resorts, but I’m not sure that we are there yet from a consumer-buying decision with all the other products in the market.
“Conrad in major cities: Sydney, Melbourne make the most sense. You’ll probably do a Conrad in Auckland, other than that the market is a Hilton and Doubletree market with a focus service opportunity.”
Watts said if a Sydney Conrad was to get off the ground it would most likely be with a partner, adding that there is no lack of capital from overseas willing to bankroll a project in Australia.
“Whether it’s institutional capital from the US or high-net-worth capital from Asia, everybody wants this market and people want to invest in Australia, so there’s no shortage of capital.
“We’ll continue to look for an opportunity,” he told media on Wednesday.
Watts said “concerns” he had about the group’s lack of luxury room inventory in Melbourne would be addressed in a few years through the addition of a new “600-room” property. Without mentioning or confirming a specific hotel name, that addition is understood to be under the Hilton banner.
Hilton’s Vice President of Operations, Australasia, Heidi Kunkel, said the company was keen to progress its development pipeline in this region, with a vision to double its footprint. In Australasia, Hilton has 27 hotels in Australia, New Zealand, Fiji, Port Moresby and French Polynesia.
“The Hilton brand, our flagship brand, has about 100% brand awareness in Australia. We have our flagships in Australia which have been here for a number of years. We’ll be adding to that in Sydney with the Hilton Parramatta,” she confirmed. Another Hilton Hotel has already been announced for Suva, Fiji.
Hunkel, who celebrates 12 months with Hilton in the coming week, also reiterated that the Hilton brand “will be back ” in the Victorian capital.
“We’ll have the Hilton flag coming back to Melbourne importantly, which is the key one that is going to be opening up in the next couple of years,” she added.
Aside from Hilton, growth brands in this area for the hotel company include DoubleTree by Hilton and the mid-range, Hilton Garden Inn.
Pictured: Jane Lyons, General Manager, West Hotel Sydney, a Curio Collection Hotel; Alan Watts, President – Asia Pacific; Hilton; and Heidi Kunkel, Vice President – Operations, Hilton Australasia.