Monday, 12 May 2014

1971: The struggle to provide hotel rooms

According to an article in The Sunday Telegraph in March 1971, Sydney had only three hotels that were international standard:
  • Wentworth Hotel (Softiel Wentworth today)
  • Menzies Hotel 
  • Chevron-Hilton (Kings Cross)
The Wentworth and Menzies Hotels still trade decades later.

1 Oxford Street March 7 1971 sunday telegraph
Source: McGlynn, Kerry. 1971. "There's no room at the Inn." The Sunday Telegraph, March 7,  9. 

The concern was that Sydney was not responding to the need to build more hotel rooms as tourists flocked to Sydney. Only the Lanray Centre (Hilton Hotel) was under construction. It was like that over the past few years until recently but James Packer's Crown Resort will hopefully be one step in the right direction along with the new hotel slated for Darling Harbour. Boutique hotels were virtually unheard of then and only now, were embracing them like the hotel proposed by Greenland for the former Water Board building in Pitt Street.

Catering to tourists has always been a challenge for Sydney. We have taken some steps lately, but it will always be there.

But why this situation? The cost of building in Sydney. One gets a better return with either an office tower (like in the 1970's and today) or in more recent decades, apartment towers. 

In the 1990's there was a boom in hotel rooms in central Sydney to cater to visitors for the 2000 Olympic Games. After the games, there was a massive oversupply in the market. Tourist numbers fell following the September 11 terror attacks in the United States. Add a booming residential market and there was a problem. Kings Cross was the traditional centre for hotels but now the city centre had what the visitors wanted and operators decided apartment conversion was the go.

The former Gazebo Hotel at Kings Cross may have the same exterior but its use has changed from hotel to residential following the 2000 Olympic Games.
Photo taken by the author. 

The price of the land had risen. Several years later, Sydney was paying the price for their loss and now we are merely catching up.

If we cannot provide the rooms, the tourists will not come. James Packer knows this and that's why he wants to spend $1.5 billion to get his casino resort at Barangaroo.