Brisbane Growth Sparks Bargain Rates
<B> Brisbane Growth Sparks Bargain Rates</B>
By Fred Gebhart
<I>Brisbane, Australia</I> - Travel managers can expect good hotel deals in Brisbane, at least through the year 2000. Spurred by an influx of corporate headquarters and a busy convention center, the business-oriented room supply jumped more than 10 percent in the past 18 months alone. More openings are slated for 1999.
At the same time, economic problems in Japan and the rest of Asia have trimmed regional business travel into Queensland and the rest of Australia by an estimated 8 percent.
"There will be an oversupply unless the market changes," warned Christopher Bright, sales manager for Ozaccom, a Brisbane-based travel management and convention accommodation firm. "We're more reliant just now on the corporate and conference sectors."
As the capital of the state of Queensland, Brisbane has long been a familiar destination for government travelers and businesses that depend on government contracts. The once-sleepy city burst onto center stage with Expo '88 and has never relinquished the limelight.
In the past decade, Brisbane has opened a convenient and spacious international airport, built the largest convention center in Australia and become the refuge of choice for firms fleeing the escalating prices of Sydney and Melbourne.
Anderson Consulting, Boeing and Shell are only the latest firms moving their Asia-Pacific operations to Brisbane, said Robert O'Keeffe, head of the Brisbane Convention & Exhibition Center.
A steady increase in demand, starting with Expo '88, then the BCEC, which opened in 1995, and now growing corporate headquarters operations, has boosted the downtown room supply to over 12,000. The Expo and the convention center sparked an initial wave of hotel construction, including the Brisbane Hilton (320 rooms), the Sheraton Brisbane (470 rooms), Rydges South Bank (305 rooms connected to BCEC) and the Mercure Hotel Brisbane (191 rooms). Most are concentrated in what is usually referred to as the "top end" of the central business district, directly across the Brisbane River from BCEC, originally the Expo site.
Corporate growth is expanding what has been a compact downtown market area. High real estate costs are pushing new business construction south and east from the original city center.
Hotel construction is following, from The Heritage (252 rooms) to Quay West (102 rooms) and Brisbane's newest business property, the Brisbane Marriott Hotel (267 rooms). A 220-room Radisson is slated to open in late 1999.
"This end of the central business district is booming," said Marriott's marketing director Janell MacGinley. "We're at the end of the street right now as far as business is concerned, but we'll be right in the middle of the action in three years."
The Marriott, which opened in May, already is at the center of Brisbane's corporate whirl. The airport is 15 minutes away by taxi, and The Stock Exchange and Riverside Center, the legal and financial heart of Northern Australia, are a three-minute walk from the front door. The convention center is 15 minutes by City Cat, the high speed river ferry system, or a 30-minute stroll through downtown.
And for U.S. travelers, Brisbane prices are hard to beat. Rates citywide range from $50 for three-star properties like the new Ibis, to a high of $130 for five-star rooms with a river view at The Heritage.
Hoteliers would like to boost rates, Bright said, but with occupancy rates currently around 70 percent, they don't have much leverage.
Travelers have an even stronger hand at the Marriott. With summer occupancy about 37 percent and a target of 65 percent for the year, the Marriott's $250 rack rate is pure fiction. Corporate meeting groups are coming in at $95 to $100 per night, MacGinley said. Travel managers who can offer multiple room nights should be able to do as well.
How long Brisbane's bargain rates will last is anyone's guess.
Australia is expecting a jump in arrivals with the 2000 Olympic Games in Sydney, a jump that is expected to boost occupancy and room rates nationwide.
Marriott's U.S. sales offices have been sending corporate business to Brisbane almost since the first night, MacGinley said. Unlike Australian and Asian business travelers, who are extremely rate conscious, she said, U.S. travel managers and travelers seem willing to balance service and location with price.
"Once you reduce your rates to a certain point," MacGinley said, "something has to go. Service is a very high priority, particularly out of the U.S. market. And right now, the Marriott brand is stronger out of the U.S. than any other international brand. We can't afford to let that quality perception slip.