13 SEPTEMBER 2016 - TFE Hotels has reported unprecedented portfolio growth in its key destinations and its biggest pipeline of new hotel projects on the back of a year of stellar growth in some of its key markets, as it prepares for the opening of two new hotels this year and another 16 in the years ahead.
In the financial year ending 30 June 2016, revenue grew in Sydney, Melbourne, Hobart, Auckland, Wellington and Christchurch, compensating for lack of growth in Darwin, Brisbane and Perth.
TFE Hotels CEO Rachel Argaman said that in Sydney revenue was up 5.3%, despite the impact of rooms being offline for major refurbishments at some hotels, and in Melbourne, up 4.2%.
“The Sydney hotels enjoyed strong rate growth largely via public and contracted channels, while Melbourne had strong performance overall, yielding on rate over the Royal Edinburgh Military Tattoo and events such as the Australian Open,” Ms Argaman said. “Travelodge Southbank and Travelodge Docklands have seen standout performances with huge rate growth, winning new business and yielding over other event dates.
While Perth and Darwin markets fell across the hotel industry in general by 17.4%, 11.8% and 4.3% (Smith Travel Research data), TFE Hotels managed to outperform the market these locations, leveraging its strong relationships to maintain high levels of base business, and thus yield wherever possible. Across its portfolio of 70 hotels in six countries, TFE Hotels achieved an occupancy of 85 per cent, driven by Sydney at 90% and Melbourne at 89%, notwithstanding several hotels under refurbishment.
TFE Hotels, which formed in 2013 as a joint venture between Australia’s Toga Group (1963) and Singapore’s Far East Hospitality Holdings, added two new hotels to its portfolio in the past 12 months – the spectacularly designed award-winning Vibe Hotel Canberra Airport and the chic and contemporary Adina Apartment Hotel Auckland, Britomart.
TFE Hotels CEO Rachel Argaman said: “Our Australian and New Zealand hotels enjoyed the benefits of a strong uplift in consumer demand and expanded domestic and international airline capacity into key destinations as well as the increase in inbound Asian travellers.”
Within the group, New Zealand proved the star performer, with its Christchurch, Wellington and Auckland hotels achieving RevPAR increases of between 10% and 15% and average occupancy rates in the mid-80s.
Ms Argaman said the New Zealand hotel market continued to go from strength to strength off the back of record international visitor numbers to the country, up 11% to 3.34 million in the year to July.
“This unprecedented interest in New Zealand as a leisure and a business destination is contributing to record high demand for hotel rooms across the North and South islands,” Ms Argaman said. “With hotels across three cities, we continue to power along in this market and are actively looking for more hotel opportunities in Auckland, Queenstown and Wellington.
“The traditional low season in New Zealand seems to be diminishing, which will be even more evident next year when major sporting events will put further upwards pressure on occupancies. The Lions rugby team from the UK and Ireland, the World Masters Games in Auckland and the NRL Rugby Nines are setting us up for a bumper winter and spring.”
Ms Argaman said Adina Apartment Hotel Auckland, Britomart was capturing Vector Arena’s concert crowd, drawn to the new Yard Bar & Eatery for pre-and-post show dining, as the hotel headed towards its one year anniversary this November.
“Travelodge Wellington continues to thrive as a convenient location in the culture capital of New Zealand, particularly with the World of Wearable Art events rolling around, while Rendezvous Hotel Christchurch is enjoying a captive audience in a tight market as the tourism market continues its rebound,” she said.
Other markets with strongest performance among the TFE Hotels group were Hobart, up 15% in RevPAR year on year, and Adelaide.
“Adina Apartment Hotel Adelaide Treasury continues to do well with small business and leisure groups and the fact that it is such a great product helps it beat its competitor set. Events have yielded good rate growth this past year, which it has capitalised on with its variety of quality room types,” she said.
Ms Argaman said Brisbane, Perth and Darwin had not performed as well as other markets in 2015-2016.
“The end of the resources boom has seen the Perth market struggle across the industry, but our hotels there still report some of the highest average room rates in our group,” she said. “Rendezvous Scarborough’s strong summer performance, given its spectacular beachside location, and Adina Apartment Hotels having won long-stay business in the first half of the year, allowed us to hold rates and occupancies above market levels.”
She said Brisbane was a very challenging market where supply had constantly increased in the past two years with a further 774 rooms introduced in the financial year 2015 to 2016.
“However, our belief in the future growth of strategically located hotels in Brisbane is shown in our plans to operate two flagship hotels there in coming years – an Adina Apartment Hotel in a beautiful heritage building at the redeveloping Queens Wharf and sleek and sophisticated The Calile at the hot new lifestyle destination, James St in Fortitude Valley, which will fall under our new TFE Hotels Collection brand.”
Ms Argaman said Darwin continued to be a tough market but the Adina & Vibe Darwin Waterfront and Travelodge Hotel Darwin there had performed above market in terms of rates and occupancies by holding onto long stay conference and crew business.
“Canberra is expected to pick up significantly for us now that Hotel Kurrajong and Vibe Hotel Canberra Airport have hit their strides since opening in late 2014 and late 2015, and now that the Federal election is over, which hampered travel to the Capital for several months,” she said. “The fantastic drink and dine options at both hotels are proving a drawcard.”
Ms Argaman said the company had big expansion plans for Europe, where it became the first Australian accommodation group to operate hotels when it opened Adina Apartment Hotels in Copenhagen and Budapest in 1998 and later another five in Germany. It has since unveiled plans for another five in Germany.
“We are very excited to open the doors of two new Adina Apartment Hotels in Frankfurt and Nuremburg this October and November, then in Leipzig and Hamburg in 2017, and later in Munich,” she said. “We are evaluating a number of other development opportunities in Germany as we speak.”
Adina Apartment Hotels will also add five new properties to its portfolio in Australia – the exciting development at the historic former Pentridge Prison site near Melbourne and new developments at Fremantle, Western Australia, Macquarie Park business centre in North Ryde, Australia Square in Sydney and at Queens Wharf in Brisbane. It will expand the total number of Adina hotels from 28 to 40 – a big milestone since the company opened its first apartment hotel, a Medina, at Randwick in 1982.
The rollout of the next generation of Vibe Hotels will continue with the unveiling of the newly refurbished Vibe Hotel Rushcutters in Sydney later this year and then the refurbished Vibe Sydney and Vibe Gold Coast, as well as new hotels at North Sydney’s Northpoint and Hobart in 2018. The new Travelodge Hotels’ “Refreshingly Simple” brand refresh also continues, with a new hotel to open at Sydney Airport next year.
TFE Hotels is the only company headquartered in Australia to design and manage hotels end to end, from concept to successful operation. It has 70 hotels in Australia, New Zealand, Asia and Europe and has 16 more in the design or construction phase, to open the next five years.
TFE Hotels was established in 2013 as a joint venture between Australian apartment development and hotel management company, Toga Group (1963), and Singapore’s Far East Hospitality Holdings.
Its six hotel brands are: Adina Apartment Hotels, Medina Serviced Apartments, Rendezvous Hotels, Vibe Hotels, Travelodge Hotels and the new TFE Hotels Collection.
www.TFEhotels.com
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