As the tourism industry experiences a healthy recovery in growth, evolving consumer preferences are increasingly challenging the industry. At the annual HICAP ANZ meeting held late in 2023, industry leaders convened to dissect the emerging trends shaping hotel investment and development in Australia and New Zealand. Three prominent trends emerged as key drivers in the industry, offering unique opportunities for hoteliers and investors looking to make a mark in the hotel space.

1. Experiential connection:

Today's travellers seek more than just a place to stay; they crave immersive experiences that allow them to connect with the local culture and environment. Hotels that can curate authentic spaces and experiences reflecting the essence of their destination stand out in a crowded market. From art and cultural exhibitions to wellness retreats and sustainability initiatives, hotels are leveraging experiential offerings to attract discerning guests. Furthermore, food and beverage outlets are becoming focal points for showcasing local-first produce, with menus crafted by renowned chefs, providing guests with a taste of the region's culinary delights.

2. Technological innovation:

Embracing technological advancements is no longer an option but a necessity for hotels striving to enhance efficiency, productivity, and guest experience. Automation plays a pivotal role in streamlining operations, addressing labour shortages, and improving service quality. Concierge robots, automated check-in and check-out kiosks, and digital room keys are just a few examples of how technology is revolutionising the hospitality landscape. By integrating these innovations seamlessly into their operations, hotels can stay ahead of the curve and deliver unparalleled convenience to guests.

3. Sustainability:

Travelers are increasingly prioritising eco-friendly accommodation that aligns with their values of wanting to do good. Greenwashing tactics are no longer effective; instead, hotels must demonstrate genuine commitment to sustainability through tangible initiatives that seamlessly integrate with daily operations. From energy-efficient design and waste reduction strategies to sourcing local, organic materials, sustainable practices have become integral to the hotel experience. While the initial investment in sustainability may be substantial, the long-term benefits are undeniable, appealing to both environmentally conscious guests and investors seeking socially responsible ventures.

However, staying on trend also requires striking a balance between innovation and longevity, ensuring that the product remains adaptable, while also lasting through a profitable lifecycle.

Three hotel groups stand out as examples of successfully adapting to these trends.

QT hotels are a uniquely Australian group of hotels and resorts offering distinctive experiences connected to each location through art, design, locally sourced food and beverage offerings and quirky, theatrical encounters with staff.

The group has restored and transformed various existing buildings of which the most iconic is the 17 month long adaptive reuse transformation and restoration of the State theater and Gowings building now housing QT Sydney. The 113-year-old David Jones heritage building in Newcastle was also recently transformed into the youngest member of the QT group of hotels.

The onsite food and beverage offering is sustainably and locally sourced and the group prides itself on offering tech solutions as part of their seamless sustainability driven future.  

Ovolo hotels are a family-owned group of hotels and restaurants that started with the adaptive reuse transformation of a Hong Kong office building into serviced apartments in 2002. The group now boasts 13 locations, many of which were transformed from old industrial properties into immersive experiential spaces synonymous with the eccentric, fun-loving Ovolo hotel brand.

The group has a rigorous sustainability agenda with a 'Do Good. Feel Good.' policy driving strategy. The Plant’d ‘Veg Pledge’ has seen their flagship restaurants serving locally sourced, plant-based dishes and for every direct booking at an Ovolo hotel, the group will plant one tree.

There is no shortage of tech in Ovolo hotels, with AI Chatbots, mobile ordering apps and smart technology seamlessly integrated to personalise the customer experience.

Ace Hotels have mastered the art of curating an experiential connection to the sites and cities in which they operate. Since its inception in New York in 2014, the Ace hotel’s AIR (artist-in-residence) program has witnessed hundreds of artists infusing the décor of the hotels that inspired them during their residencies. The Ace hotel group’s unwavering commitment to embracing local culture and revitalizing urban spaces is highlighted through this program, connecting narratives, artists and materials that reflect the social and cultural identity of the buildings and cities they inhabit.

The maxim ‘One day is not enough’ drives the Ace Hotel Planet Earth initiative which supports various organisations with sustainable agendas. Their commitment to this sustainable approach has filtered through to their design choices in refurbishing pre-owned furniture, having 100 percent organic mattresses in all rooms, avoiding new builds and gut renovations, instead using as much of the existing architecture, and utilising salvaged wood when remodeling iconic, existing buildings in key locations.

All three these exceptional hotel groups provide their customers unique, technologically savvy, experientially driven, environmentally conscious stays demonstrating that hotels excelling in these areas, are positioned to thrive in an increasingly competitive landscape. By aligning business development strategies with these evolving consumer preferences, hoteliers can advance the hospitality industry and maximise their investment returns.

Substantially renovating an existing landmark in an iconic area to optimise the customer experience or completing sustainable upgrades to improve the hotel’s sustainability rating or even upgrading to transition to more tech savvy solutions for a more progressive, user-friendly hotel stay, all hold substantial property tax depreciation potential.

For expert advice regarding the benefits of property tax depreciation, contact BMT Tax Depreciation or request a quote.

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