In line with this, the application of cutting-edge technologies and innovation has become a burning issue in the construction and refurbishment of hotels.
In this article, Jeff Robinson, Aurecon Principal Engineer and Sustainable Buildings Group Leader; Wouter Brand, Aurecon Project Director in the Middle East and Stephen Olckers, former Aurecon Head of Building Services (Cape Town) & Hotel Business Development in Africa, expand on the current demand for hospitality industry services.
They discuss the importance of building the kind of establishments that respond to the needs of patrons; some of the latest technology being applied to modern hotels, including the importance of sustainability and connectivity; and the benefits for hotel design and construction of partnering with experienced engineers that have insight into new techniques for construction and conversions.
Jeff: Hotel construction in Australia is picking up as the number of visitors to Australia grows at the fastest pace in the last nine years, sending occupancies in Sydney to a record and the highest in Asia after Hong Kong and Tokyo. Sydney’s average hotel occupancy is set to reach 88.8 percent by the end of 2016, the highest since 2000, according to economics advisory firm Deloitte Access Economics.
Australia is also gearing up to capitalise on its next boom industry: Chinese tourism. And it’s set to be a huge windfall for the country.
As part of its Tourism 2020 plan released mid-2013, Tourism Australia estimated that the Chinese tourism market could be worth up to $9 billion by 2020. By May this year, that had been upwardly revised to $13bn. In addition, HSBC estimates that by 2020, up to 20 percent of short-term arrivals in Australia every month will be from China, and Chinese tourists will on average spend almost double the amount per night than other visitors.
Jones Lang LaSalle (JLL) in their Australian and New Zealand Hotel Development Register has identified that across Australia there are currently 7 588 rooms in the development pipeline (under construction and proposed), which represents the highest level for more than a decade.
JLL have also identified a further 75 mooted projects across the ten major accommodation markets in Australia, comprising 16 374 rooms, which indicates Australia is on the verge of the next hotel development cycle.
In addition, JLL has identified a further 21 proposed accommodation projects in New Zealand’s main centres, consisting of 2 632 rooms. Airport and convention centre hotels are attracting the most developer attention.
There are seven hotel projects currently under construction in New Zealand’s main centres, with a total of 836 rooms. This represents an increase of 5.4 percent on the existing room supply. These projects encompass office conversions, hotel expansions or reconstruction projects.
Stephen: According to the 2014 hotel pipeline report by W Hospitality Group, of the 215 hotels in the pipeline for Africa, 142 hotels (almost 70%) are in the sub-Saharan African region. Additionally, PricewaterhouseCooper’s Passport to Africa, Hospitality Outlook 2014 – 2018, gives an overview of how the hospitality industry in South Africa, Nigeria, Mauritius and Kenya is expected to develop over the coming years.
The report shows that Nigeria will be the fastest-growing market over the next five years with a projected 22.6% compound annual gain.
Wouter: Similarly, according to the Tourism and Hotel Market Outlook by Deloitte, Dubai attracted 7.8 million hotel guests and 2.1 million serviced apartment guests in 2012, representing a total of 9.9 million guests over a 12 month period. And remarkably, if the unaffiliated hotels are excluded, Dubai’s branded hotel market grew by over 105% from 81 hotels in 2006 to 167 in Q1 2014.
In addition, the Global Destination Cities Index 2013 ranked Dubai as the world’s seventh most visited destination for international overnight visitors, ahead of Hong Kong, Barcelona, Milan and Rome.
Stephen: Most of the work we are currently doing in Africa is in Nigeria – the country’s economy is booming and hotel room revenue rose by 59% between 2009 and 2013.
Hotel developers in Nigeria need to ensure, however, that they remain in sync with customer needs. Building ‘iconic’ hotels that are marketed at a very high level (such as five-star hotels and even six-star hotels aimed at wealthy travellers) may not be the best strategy to meet the needs of the country’s hospitality industry, which is driven primarily by corporate and business hotel requirements.
At a business level, three- and four-star hotels are in short supply, so there’s a gap to be filled.
Wouter: In line with this, there is a lot of government support for three- and four-star hotels in the Middle East. Government recognises tourism as an important industry and they subsidise these types of developments because, if done well, lodges, restaurants and hotels can generate high returns in future.
While the market for five-star hotels in the Middle East is saturated, the market for three- and four-star hotels is still largely untapped. For every person that can afford to stay in a five-star hotel, there are twenty more that will be able to book their stay in a three- or four-star hotel.
Other main drivers for these types of establishment are the tax exemptions that these hotels enjoy, as well as the business opportunity presented by World Expo 2020. In November 2013, the United Arab Emirates won the right to host the World Expo in 2020. Since the first Great Fair of 1851, World Expos have continued to be one of the largest and most enduring global mega-events.
This will be the first time that the World Expo is staged in the Middle East, North Africa and South Asia (MENASA). The Expo lasts for six months and attracts millions of visitors who explore exhibits and cultural events. Hotels need to be built in order to accommodate all these visitors.
Medical Tourism has also gained a great deal of momentum in the Middle East and it’s an important driver in the hospitality and tourism industry. Dubai has become a medical tourism hub and specialists from all over the world are setting up shop in Dubai. Top hospitals and medical practices need to cater to this need by becoming places where patients want to stay and recover from an operation.
Stephen: In line with this, there is a lot of government support for three- and four-star hotels in the Middle East. Government recognises tourism as an important industry and they subsidise these types of developments because, if done well, lodges, restaurants and hotels can generate high returns in future. While the market for five-star hotels in the Middle East is saturated, the market for three- and four-star hotels is still largely untapped.
For every person that can afford to stay in a five-star hotel, there are twenty more that will be able to book their stay in a three- or four-star hotel. Other main drivers for these types of establishment are the tax exemptions that these hotels enjoy, as well as the business opportunity presented by World Expo 2020.
In November 2013, the United Arab Emirates won the right to host the World Expo in 2020. Since the first Great Fair of 1851, World Expos have continued to be one of the largest and most enduring global mega-events. This will be the first time that the World Expo is staged in the Middle East, North Africa and South Asia (MENASA). The Expo lasts for six months and attracts millions of visitors who explore exhibits and cultural events. Hotels need to be built in order to accommodate all these visitors.
Medical Tourism has also gained a great deal of momentum in the Middle East and it’s an important driver in the hospitality and tourism industry. Dubai has become a medical tourism hub and specialists from all over the world are setting up shop in Dubai.
Top hospitals and medical practices need to cater to this need by becoming places where patients want to stay and recover from an operation.
Jeff: Similarly, much of the growth in the Hospitality Sector in Asia and Australia will be driven by the increased demand for economy hotels, which cost less than full-service hotels because guests pay only for basic amenities (bed, shower, no room service, and free Wi-Fi).
Economy ‘hotels’ promise everything you need and nothing you don’t. It’s now cool to travel cheap thanks to a new wave of budget and economy travel brands finding new ways to tailor products and appeal to the increasing numbers of cost-conscious travellers The convenience of this model fits the ’on-the-go’ lifestyles of today’s business traveller and growing millennial population.
There is also a growing trend of taking more frequent but shorter breaks instead of one long holiday. To minimise expenses, most travellers will look to stay in economy hotels so they can afford to travel to more places. Guests value a great location, good design, customer service and choice.
From a development perspective the budget product offers an investment rational that allows optimisation of the revenue generating potential from smaller, more cost-effective plots of land in non-core CBD locations.
This is achieved by not having to include low yielding, non-essential guest facilities such as business centres, conference facilities and day spas, whilst allowing the flexibility to provide more tailored core offerings such as grab-and-go food and beverage outlets, and smaller room floor plates.
The sector provides very strong return on investment, given its low cost operational model, and growing demand by the consumers, which is fuelling strong revenue per available room (RevPAR) growth.
Jeff: In Australia, New Zealand and Asia, there is an increased awareness amongst the major hotel operators of the importance of minimising the negative environmental and social impact of their operations. Guests are using social media apps and websites like Trip Advisor to check out the environmental performance of the hotels and resorts they are considering.
Hotel operators have also seen that improving the energy efficiency of their properties can quickly deliver bottom line profit improvement, as wastage of resources is reduced without compromising the customer experience.
The major hotel chains have developed their own branded sustainability programmes, which they are using to drive change within their organisations and to engage their guests. Hotels are also using independent environmental certification programmes like EarthCheck to validate their carbon claims and guide their sustainability initiatives.
In countries where air pollution is a problem, hotels are having to address how they can provide a comfortable and healthy environment for their guests when the outdoor environment is polluted. High performance air filtration systems can remove harmful pollutants such as microparticles and Volatile Organic Components, while careful sealing of the buildings and pressure testing the building at the end of construction is effective at preventing polluted outdoor air leaking into the building through gaps in the building fabric.
In addition, guests expect today’s establishments to follow the very latest trends in technology. New technologies are being used to provide guests with a more interactive, customised experience during their stay. Internationally, hotels are working on how remote check-ins (via guests’ Smart Phones) can provide guests with instant access to their rooms; how to enable guests to easily play their own content from media players within their hotel rooms and on their hotel televisions; and how to benefit from Smart Apps that give clients a ‘concierge’ in their pockets.
Technology extends to sustainable practices within the hotels as well, such as smart thermostats that can determine when to cut back on heating and cooling automatically when a room is unoccupied. Hotel designers are using LED lighting to save energy whilst having the ability to change colour and intensity to create different moods.
Stephen: Sustainability and energy efficiency are the buzzwords for hotel developments in Africa. While energy efficiency isn’t regulated in many African countries, the rising costs of electricity on the continent make this a basic requirement for most clients. The developer of the hotel may have to accept marginally increased capital expenditure costs to implement sustainability designs and technology, but they will share in the savings on the bottom line. Thus a strong sustainability impetus exists.
Increasingly tight construction programmes have also made modular designs an important consideration. This trend offers a number of benefits, including cost savings due to several components of the construction being created off-site. While the ‘common areas’ of the hotel are often built on-site, modular design means that many smaller sections can be created elsewhere and installed relatively quickly.
Wouter: An experienced engineering company offers clients the ability to tap into many different experts, specialists and experienced engineers and consultants within the company.
Besides MEP, a host of specialist services relating to acoustics, waste management and Environmentally Sustainable Development (ESD) are crucial in ensuring the success of hotel projects.
The Middle East, in particular, is a seismic region and local authorities tend to be conservative in their approach to design due to the frequency and size of earthquakes that the area has experienced in the past.
Last year, for example, there was a tremor in Dubai and this lead to significant damages. This means that seismic design is a crucial factor in obtaining project permissions.
An additional consideration is environmental challenges. In Dubai, below ground concrete has to have a protective membrane to protect it from chloride and sulphate in the soil. In addition, the water table is shallow, so basements need adequate waterproofing and dewatering elements.
Stephen: The challenges inherent in creating internationally renowned and top quality business hotels in Africa are immense and include local climate; building conditions; economic trends; a potential lack of local skills; scarcity of readily available material; and demanding legislative requirements.
Clients who want to grow into Africa should ensure that their project team includes members who have worked throughout unique African markets.
There is no need for a client to go through a steep learning curve. Choosing professionals who are able to guide you through the entire process represents far less risk.
Jeff: Aurecon understands all aspects of the leisure sector because we have designed and delivered many types of hotels, resorts, casinos, theme parks and convention centres around the world.
We understand hotel rating standards and specifications for many of the major hotel brands and we understand the different sustainability programmes that are being employed by the major hotel chains.
We have experience in designing energy and water metering and monitoring systems to provide real time environmental monitoring in a way which is meaningful and engaging to the hotel occupants, and which helps drive positive behavioural change.
When you partner with experienced engineers such as Aurecon, you will be working with teams that understand all the aspects of developing, owning and operating leisure facilities. Different strategies need to be adopted to design luxury, mid-level and budget hotels and this understanding has to be implemented in all aspects of engineering – right from the design phase.
Experienced engineers not only have a solid grasp of all the various design principles and construction techniques that need to be implemented, but they also understand the opportunities that new technology brings to enhance guests’ experiences.
Jeff Robinson is Aurecon’s Principal Engineer and Sustainable Buildings Group Leader. He focuses on inspiring architects to maximise the environmental performance of buildings.
This includes how to refurbish buildings to incorporate sustainable designs; how to determine the economic life of buildings; and what investments need to be made at different stages to keep them operating safely and reliably.
Working throughout Australia and New Zealand, Jeff is a passionate advocate for the design and renovation of Environmentally Sustainable Buildings.
Wouter Brand is Aurecon’s Project Director in the Middle East.
Involved with hotel design and construction throughout the UAE and within economic hubs such as Dubai, Wouter delivers project management, consulting and technical assistance for hotel and leisure facility construction projects.
Stephen Olckers leads the Mechanical and Electrical Building Services Unit at Aurecon South Africa’s Cape Town office. He heads up a team of experienced engineers who work on projects within South Africa as well as the rest of Africa.
Aurecon has earmarked Africa as a significant growth market in the hotel and leisure sector and it is Stephen’s responsibility to ensure Aurecon offers innovative, sustainable solutions for projects in this region.