The event that stopped Melbourne

And no, its not The Melbourne Cup.

Back in October saw the busiest week that the Melbourne hotels experienced all year. Bigger than The Melbourne Cup, bigger than the AFL Grand Final, bigger even than the F1 Grand Prix.

What was it I hear you ask? The Jehovah's Witnesses Convention! Yes, you read that correctly. October 15 - 19 thousands and thousands of Jehovah's Witnesses descended on Melbourne and the hotels were full for most of the week. The Saturday night was also the Caulfield Cup which created a melt-down as availability was virtually non-existent and rates were through the roof. 

Sebel Melbourne gone

I was trying to find an e-mail address for the Sebel Melbourne hotel this morning and had trouble finding their current website. They were previously a Mirvac hotel but changed hands when Accor purchased the Mirvac porftolio of hotels. The Mirvac website link no longer worked and when the Accor link failed as well I started to think something was going on.

I then found this article about the hotel closing:

CBD hotel closes doors, converts to apartments

February 20, 2013

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Kate Nancarrow

ACCOR'S Sebel Hotel at 398 Collins Street closed its doors on Saturday and in three weeks its 150 apartments will return to the control of 119 individual owners in a reversion-conversion the owners corporation manager has described as ''fast and a first''.

The hotel chain had held a 12-year lease on the apartments and suites within the heritage-listed 1876 former bank building but owners corporation manager Alf Musumeci, of L.R.Reed, said as the lease drew to a close the 119 owners, who had been part of an income-pooling agreement via the hotel's lease, felt they ''weren't getting the returns they'd hoped for'' and decided to regain control of their individual apartments.

Read more: http://www.theage.com.au/business/cbd-hotel-closes-doors-converts-to-apartments-20130219-2epde.html#ixzz2LPSzYQr5


I've been disappointed by our lack of production in Melbourne post-GFC but when hotels are converting back to residential apartments due to disappointing returns you know the hotel market in that city is soft.

The return of Tiger Woods

The great news yesterday was the official announcement that Tiger Woods will return to Melbourne later this year to defend his Australian Masters title.

His visit to Melbourne last year coincided with corporate travel bouncing back after the economic slowdown. Thanks to Tiger (and a Britney Spears concert), it was a massive week for Melbourne hotels and great for business around here as well.

While looking for one of the news reports about the announcement, I came across the news article below that 2011 will be even better! Click on the title to read the full story. Great news for golf fans, great news for us and Melbourne hotels.

Woods also set for 2011

MARTIN BLAKE
June 10, 2010

TIGER Woods' decision to defend his Australian Masters title has guaranteed another bumper edition of the tournament that was in danger of dying two years ago. But if 2009 was big and 2010 is just as big, then 2011 should be a monster.

That's because the Presidents Cup, the biennial teams event between the United States and an International team, is to be played at Royal Melbourne in the same month, November 14-20. By piggy-backing on to that tournament, the Masters should have not only Woods playing, but a host of other big-name golfers looking for some tournament play on the sandbelt.

The Masters is likely to be held at Kingston Heath from November 10-13, the week before the Presidents Cup. Possibly the Australian Open will jump on, too, by scheduling to play in Sydney the following week, for three weeks of top-level play. It is the kind of window of access that Australian tournament golf has craved since the halcyon days of Greg Norman's fame.

Tiger lands in Melbourne

Tiger Woods may have only arrived in Australia yesterday and had his first practice round today but his legend definitely preceded him.

We started getting calls last week and had an extremely busy afternoon on Friday doing nothing but bookings for Melbourne hotels. Sure, its not just Tiger in town that has the city full, Britney Spears also has concerts this week ... but we all know who the real draw-card is.

The demand for Melbourne continued on Monday but unfortunately by mid-afternoon the city was essentially full. I only found a few more rooms this morning but they didn't last long and unfortunately nothing really changed throughout the day. There's nothing I hate more than saying we can no longer find rooms but that's what happened today.

Being a golf fan, I'm a huge fan of Tiger Woods. Anyone still needing accommodation in Melbourne this week may not feel the same right now.

Australian hotel market ... struggling

A couple of signs that show you how much the Australian hotel market is struggling right now.

1. Adelaide didn't fill for the Clipsal
Usually this is a can't miss event for Adelaide hotels. They can charge what they like for rooms, they can enforce a 4 night minimum stay and they usually fill with a few weeks to go. This year, with a week to go almost all of the hotels still had plenty of rooms so they dropped their rates and their minimum length stay requirements. But it was too late and the city didn't get close to filling.

2. Melbourne didn't fill for the Grand Prix
Again, this is usually a very good event for us and the Melbourne hotels. They charge full rack rates and have a 3 night minimum stay. Some of the hotels filled this year but in the lead up to the Grand Prix you could've got a one night stay on the Saturday night (usually the biggest/most popular night) for less than $200 at a 4.5 star property.

3. Canberra didn't fill for Budget
This was probably the most surprising. Canberra has a lot less 4, 4.5 and 5 star hotels than most of the other cities and usually fills at the drop of a hat when Parliament is in session or there is any sort of event happening. Budget is usually the busiest night of the year for Canberra hotels yet this year most of the 4 star hotels and above didn't fill.

Its clear that hotels aren't making adjustments to the current state of the economy. Companies are being a lot stricter with their corporate travel and aren't willing to pay the exorbitant prices that hotels have demanded in the past. Adelaide and Canberra not filling for their biggest events is evidence of that. The motels and the cheaper hotels that don't add massive event surcharges are still filling, its the top end of town that isn't and needs to make adjustments accordingly.

The next big event on the calendar is the State of Origin. I hope the hotels don't expect to get the rates they have been able to in previous years and start to price their hotel rooms more realistically. Looking at what's currently being asked, I'm afraid they will realise this way too late again ...