Sydney W Hotel sets new industry benchmark as high as its infinity pool

  

  

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The glittering opening of the new $1 billion W Hotel in Sydney’s Darling Harbour, not only bumps up the volume of luxury accommodation but also signals to operators what offerings are needed to entice guests that now want an experience holiday, not just high-thread counted sheets.

Being the first large-scale high-end hotel to open since its neighbouring Sofitel Darling Harbour in November 2017, the operators of the W, the Marriott International chain, are also setting the benchmark in environmental, social, and governance (ESG) credentials.

Sean Hunt, vice president – Australia, New Zealand & Pacific, for the Marriott International, said lifestyle-driven brands were the defining moment for new hotels as they also embraced inclusivity and sustainability.

“This is a billion-dollar project. So in Australian terms, outside a casino environment you don’t really have many hotels open to this scale and magnitude, but the owners are happy with the outcome, as is the operator,” Hunt said at the opening event last week.

“The W brand was born in New York City but always destined for this city. And, we’re very proud to call this the largest W globally in our system.”

There are 588 rooms and suites with an infinity pool on Level 29. Known as the Ribbon, it sits in the middle of the Western Distributor overpass and is home to the Imax theatre. After a series of mishaps with builders, it was finally opened on October 12.

But opening a hotel in the modern era with high costs is no easy task.

The hotel and hospitality sector is the second-largest employer of full-time and part-time staff after retail and was one of the hardest hit during the global pandemic, where all were forced to close. Some operators never recovered and closed down permanently.

“The only way these deals now stack up is if we can drive premium revenue per room over the market and what the market is telling us is they want a brand that is modern and inclusive. And it’s about sustainability. This building has got a lot of sustainability elements.”

One initiative is W Sydney’s partnership with Genesis motors, offering state-of-the-art electrified GV70 and GV60 vehicles for VIP pick-ups, special guest drives and staycation loans. There are also EV chargers at the hotel, encouraging environmentally respectful journeys to and from the hotel precinct.

The opening comes as Sydney’s hotel market is front-running the performance of the sector nationally, boasting occupancy above 75 per cent, an average daily rate above $300 and revenue per available room above $200, according to STR and Colliers.

Colliers’ head of hotel transactions Karen Wales said hotels were emerging as a preferred property investment sector, as new market entrants were drawn to conditions of easing supply, high room rates and the return of international travel.

Luxury and upscale hotels outperformed all other classes with a national average occupancy level of 70 per cent and room rate of $326, which represents growth of 59.5 per cent compared to the prior year, according to the Australian Accommodation Monitor.

This highlights the underlying strength of the sector and its reliance on a large domestic tourism base.

“While Luxury resorts are performing strongly amid the resurgence of leisure travel and desire for experiences post pandemic, we expect capital values for the broader Australian hotels market to also remain competitive compared to global peers, as international travel and revenue defends against economic fluctuations,” Wales said.

But Hunt reiterated that more airline slots were needed into Australia to help drive the tourism recovery.

“We now need additional airline slots and to play its part, the federal government needs to welcome additional carriers to this country,” Hunt said. “We need to get a competitive landscape in the hotel space.”

Colliers’ national director of hotel asset management Neil Scanlan said many of the new market entrants were partnering with known hotel fund and asset managers.

He said it was imperative for hotel operators to realise revenue gain in a market that has been impacted by a 20 per cent increase in hospitality wages since 2018 as well as the pressures to reduce carbon footprint and global events disrupting supply chains.

“Hotels need to recalibrate their modus operandi now to adapt to a fundamentally different operating environment and successfully navigate the course to uncover hotel ‘alpha’ or ‘excess’ return,” Scanlan said.

“Operators who don’t proactively align with the flight to quality, factoring in capital for asset upgrades and repositioning, while improving energy efficiency and overall operational costs, will find core issues can no longer be hidden behind the veil of strong surges in hotel room rates.”

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 The glittering opening of the new $1 billion W Hotel in Sydney’s Darling Harbour signals to operators what offerings are needed to entice guests that want an “experience holiday”. The glittering opening of the new $1 billion W Hotel in Sydney’s Darling Harbour signals to operators what offerings are needed to entice guests that want an “experience holiday”. 

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