A strategy to boost affordable accommodation in central Sydney proposes to increase the number of three-star hotels and budget rooms in what is an increasingly five-star market.
The City of Sydney has launched an Accommodation Action Plan, which proposes to lower the cost of developing affordable hotels and to review zoning around new infrastructure in a bid to open up more sites for hotel developments.
“We need to ensure local and international visitors to our wonderfulcityhave the best rangeofhotels possible,” Lord Mayor Clover Moore said. “That’s why we are working closely with accommodation and tourism experts to help provide the rooms the market wants.”
The move comes in response to a report prepared by Jones Lang LaSalle that shows that travellers looking for three-star hotels and budget accommodation are effectively locked out of central Sydney by the growing number of five-star hotel rooms.
Sydney has more hotel rooms than any other city in the country, but the bulk of its 23,300 rooms are within luxury hotels.
While there are more than 5800 rooms in the development pipeline, infrastructure projects includingDarling Harbour Live, Sydney’s Light Rail and the new Convention Centre at Darling Harbour will only increase demand for affordable accommodation.
“As the Asian visitor market, and particularly China, continues to grow in importance, initiatives like this will ensure demand is supported by the appropriate infrastructure,” Tourism and Transport Forum chief executive Margy Osmond told The Australian Financial Review.
Five-star hotels are well represented in Sydney’s central business district, such as the Shangri-La, the Langham, Park Hyatt and the InterContinental, all of which have been substantially upgraded in recent years.
Butdemand for three-star hotels is growing. The report notes that more Chinse visitors are coming to Sydney but aside from a near-doubling of rooms at the four-star Sheraton Four Points Hotel and the upcoming opening of a four-star St Giles Premier on Pitt Street, Sydney’s pipeline of affordable accommodation is limited.
Under the draft plan approved by councillors in December, the City of Sydney will look at reducing development costs to encourage more hotels in the western and southern parts of the city, close to developments such as Barangaroo and Sydney Light Rail.
The council is also considering opening up the number of hotel development sites by rezoning parts of the city, particularly on its western and southern fringes. More than 500,000 square metresof commercial floor space is expected to come up for redevelopment during the next five years, which could potentially be rezoned for new hotels, it said.
The City of Sydney is assessing a proposal put forward by private developer Alfasi to convert a disused substation in Sussex Street into a 163-room, four-star boutique hotel.
The former substation is at the centre of a rapidly growing precinct near Barangaroo and King Street Wharf.
Alfasi has proposed to increase the height limit for the site by up to 11.05 metres to make the hotel viable.