Home' Hotel Management : HM February 2018 Contents T
his past year, we’ve continued to see a rebounding of industries such as mining
that have been driving our economy over the past five years. The resurgence
in property, as well as public and private infrastructure investment across the
country have continued to drive growth in poorer performing markets.
The core markets of Melbourne and Sydney continue to perform strongly, and
Brisbane has recovered this year.
As an overall market, we continue to benefit from record numbers of inbound tourism
arrivals and growth in domestic tourism within the country.
With the completion of ICC Sydney and the expansion of the Melbourne
Convention and Exhibition Centre, we are seeing a greater focus on Australia as a
business and tourism destination for conferencing, events and exhibitions, and we expect
this sector will continue to grow significantly over the next 12 months.
The leisure market is also expanding and we are seeing investment in less Sydney-
centric inbound tourism, with airlines broadening their footprint across the country. An
example of this is the recent announcement of direct flights from China to Perth which
will begin to reinvigorate the leisure tourism market in that state.
Corporate demand has been extremely stable and we’re seeing a slight resurgence
in investment into projects and infrastructure which has driven room-night demand
over the course of the last 12 months. We expect this to continue during the next year
across our properties.
As a business, Quest is very optimistic about 2018 in terms of organic revenue as well
as network growth, as we continue to benefit from really strong underlying conditions.
We’re seeing very strong government and defence demand. And whilst there are still
some sectors – such as retail – that are languishing, most of the key sectors underpinning
the Australian economy continue to perform strongly in terms of corporate travel demand.
The Melbourne and Sydney markets as well as Hobart remain undersupplied, and
Quest will continue to pursue opportunities in these cities, as well as benefiting from the
strength of some of the mid/lower tier markets in suburban and regional areas, where the
quality of supply is quite aged and reaching the end of its useful life as hotel assets. There
are still significant opportunities for operators that recognise the strength, growth and
resilience of these markets – and are prepared to allocate some investment capital here.
During the past 12 months, Quest has cemented its partnership with The Ascott who
took a controlling stake in the company to become 80% owners of the group. This has
enabled us to begin the process of fully integrating the Quest business into the largest
global serviced apartment operator. This move follows the trend of the past five years
during which we’ve seen the majority of all the domestic hotel and serviced apartment
operators combining forces with international groups.
For Quest, it’s an exciting development, enabling us to form true partnerships with
our global corporate clientele, offering them an extended stay accommodation solution
in almost every part of the world. Given that most companies are moving to increased
consolidation, centralisation and globalisation of decision making, being able to have the
breadth of network to deliver this offer to corporate clients is quite a powerful asset to have.
This past year Quest opened eight new properties and took over three properties
previously operated by other hotel groups. We currently have the highest number of
apartment hotel rooms under construction in the history of our group, with construction
commencing this year at Docklands New Quay. We
announced our first apartment hotel in the UK city of
Liverpool, and we’re optimistic that we will see the brand
grow within that market over the next 12-18 months.
However, in the face of all this overwhelming
success and optimism, the major challenge for the
industry is the question of whether – as hotel operators
we are sophisticated enough in our ability to benefit
from this really strong period we are going through, in
terms of driving average rates in strong markets across
As a sector, we have a diverse set of backgrounds and
understanding of core business principles. This means
we sometimes act quite irrationally in the face of certain
economic conditions. Will we be equipped to set this
industry up for the future and ensure that it is resilient
enough to withstand the busts that always follow a boom?
Over the next 12 months, Quest will be developing a
very focused development plan for leaders in our sector.
The Franchisee Accelerator Program will be extended
to people from right across the industry in an effort to
improve the quality of business education within the
hospitality sector, and to educate young leaders. The
program will give them the opportunity to grow their
personal wealth in a meaningful way through owning
their own business, and overseeing the growth of their
own equity. It will comprise both training, ongoing
support, a 12-month program as well as financial
assistance and support to enable young leaders within our
industry to be able to afford to have the opportunity to
buy into their own franchise.
Now is the time to capitalise on the advantageous
conditions of today, by setting the industry up for ongoing
Number of hotels & rooms (Globally): 161 properties,
Number of employees (Globally): Over 2,000
Year first hotel opened (Globally): 1988
Year the company was founded: 1988
Brands in the organisation: Quest Apartment Hotels
Head office location: Melbourne, Victoria, Australia
Chief Executive Officer
Quest Apartment Hotels
It’s been a year of consolidation, growth and capitalising on
favourable market conditions. It’s now time to plan ahead to ensure
the future of the accommodation sector continues to be as bright
as the recent past has been.
60 HM The Business of Accommodation
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