New hotels in Melbourne: Boom continues despite COVID-19 lockdown

After several delays apiece, two new five-star hotels are due to open in the Melbourne CBD within two kilometres of each other. The Movenpick Hotel Melbourne on Spencer opens at the intersection of Bourke Street, and a couple of blocks away, Melbourne Marriott Hotel Docklands opens its doors, offering Melbourne's first rooftop infinity pool.

It follows the Marriott International's February opening of the upscale W Hotel, and precedes the company's Ritz Carlton Melbourne, scheduled for 2022.

Movenpick and Marriott are among 10 upscale hotels opening in Melbourne within the first six months of 2021, even as the city remains Australia's most affected by COVID-19 lockdowns and border closures.

In 2020, Melbourne had a loss in room revenue of $1.4 billion and in the bad news continued into 2021, with the latest lockdown keeping domestic visitors and overseas visitors negligible due to the continuing national border closure.

But hotels don't just come online overnight. The current expansion in Melbourne's hotel stocks has been years in the making.

Between 2009 and 2019, the number of domestic visitors to Melbourne increased by more than 70 per cent, while the number of international visitors doubled.

This robust growth in demand for Melbourne hotel rooms, particularly at the high end, had been met with a lack of supply. Developers and hotel companies know opportunity when they see it – several properties were thrown onto drawing boards, many of them coming online in the time of COVID-19.

"The road to opening a hotel is very long," says Dean Long, CEO of the Accommodation Association. "From looking for a site, to the property developer and operators assessing what's missing in the market, getting relevant approvals etc, it can take five years, even a decade."

"There was a shortage of hotel rooms in Melbourne pre-COVID," says Sean Hunt, area vice-president at Marriott International. The company has an additional four hotels to open in Melbourne within the next 18 months, bringing its total in the Victorian capital to seven. Despite the current pain, he remains optimistic.

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"We know there is a pent-up demand and as that demand grows, our hotel stock will be ready to respond. Melbourne is a very resilient city, and we are confident that the desire to travel will return fairly quickly."

Accor Pacific CEO Simon McGrath agrees. Accor, the company overseeing the opening of the Movenpick will add eight properties to the market over the next 18 months at an investment of more $700 million.

"People love to visit Melbourne for its world-leading events calendar," he says. "Even without international travel, events can contribute to the city making a serious tourism comeback."

For now, though, as general manager of Marriott Docklands Melbourne, Girish Talreja is on the frontline.

Having had his opening pushed from early March, to mid-May, to mid-June and now June 30, he's dealt with having to keep his 70 staff engaged, and "yoyo-ing" bookings.

Talreja said occupancy for Marriott's Melbourne hotels had been about 50 per cent prior to the latest lockdown, with weekend occupancy as high as 75 to 80 per cent. 

"We believe that is achievable in quarter four, provided interstate borders are open and city-wide events are running as scheduled," he said.

His property is offering "many firsts", including day passes to the "Insta-worthy" 28-metre pool and cutting-edge gym to non-hotel guests, Australia's first M Club (for rewards members) and an architecturally forward building.

But the signs of nervousness remain.

"What we're seeing now is a very short lead time between bookings and stays," says Talreja. "We need borders to remain open to give people confidence again."

MELBOURNE'S 10 NEW HOTELS IN 2021 (SO FAR)

  • Ovolo South Yarra
  • Next Hotel Melbourne
  • Hilton Melbourne Little Queen Street
  • Quincy Hotel Melbourne
  • Lancemore on Crossley St.
  • Movenpick Hotel Melbourne on Spencer
  • W Hotel
  • Melbourne Marriott Hotel Docklands
  • Adina Apartment Hotel Melbourne South Bank
  • Vibe Hotel Melbourne

FIVE GREAT DEALS ON NEW HOTEL STAYS

Wotif managing director Daniel Finch says "As hoteliers continue to work hard to attract Aussies back to our capital cities, there are some great value deals on offer, particularly in Melbourne thanks to the number of new hotel openings."

Some available to book via wotif.com and offering free cancellation and subject to change are"

QUINCY HOTEL MELBOURNE

There's a 20 per cent off opening special, plus book on the Wotif app to save more. Discounts available on all rooms but vary across room type. From $279 per night.

OVOLO SOUTH YARRA

Stay with 10 per cent off. Sign up (for free) to Wotif's Mates Rates and book via the Wotif app to receive further discounts. Discounts available on all rooms but vary across room type. From $194 per night.

NEXT HOTEL MELBOURNE

Enjoy 10 per cent off when booked on the Wotif app and sign up (for free) to Wotif's Mates Rates and receive an additional 10 per cent off. Discounts available on all rooms but vary across room type From $194 per night.

W HOTEL

A $50 resort credit per day and daily breakfast included. Available across all room types. From $359 per night.

Update: An earlier version of this story said the Marriot Docklands would open on June 30. The opening date has now been pushed back due to the recent COVID-19 outbreaks in Melbourne and Sydney.

MELBOURNE MARRIOTT HOTEL DOCKLANDS

Melbourne Calling Package with daily breakfast, parking and late check out at 1pm. Available across all room types until September. From $248 per night

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