Five-Star Hotel Brand Eyes Aussie Debut

Australia’s hotel development sector is on the rebound with a Japanese luxury five-star hotel brand making plans to check into the market as the tourism sector’s post-pandemic recovery continues to gain momentum.

Part of an ambitious global development strategy by Japanese conglomerate Seibu Holdings, The Prince Akatoki Hotel brand is slated for its Australian debut in Sydney in 2025 followed by Melbourne in 2026.

It marks a long-awaited return to the local hospitality sector after Japanese groups beat a swift retreat from the Australian market in the late 1990s as they felt the economic crunch of Japan's so-called Lost Decade.

In 2017, Seibu Holdings—owner of the Tokyo-based Prince Hotels & Resorts chain—completed a $50-million takeover of Australian-based StayWell Hospitality Group paving the way for its expansion.

In the next decade, it plans to grow its global footprint from 84 locations to 250 with a key focus on the Australian market, where two other new brands—Park Proxi and Park Regis by Prince—also will be introduced.

“It's about driving these new brands that we've worked for years to develop, along with Prince Hotels, to really fuse both the Japanese and the western side of our companies and create something quite unique,” StayWell’s Pacific and North Asia development manager Sarah Taylor said.

According to Taylor, the group is already circling several opportunities in Australia, with four properties in “advanced negotiations” and two others in its sights.

Brisbane will be on its radar in the lead-up to the 2032 Olympics as well as key regional locations, where robust performance during Covid mitigated a lot of the impact on city assets and sustained growth is perceived.

But the major gateway cities of Sydney and Melbourne are the group's first priority and it is looking at both new builds and retrofits of existing hotel properties for its Australian expansion.

“We're going through a massive growth phase and transition in the next 12 to 24 months of what our brand portfolios will look like in the Australian market,” Taylor told The Urban Developer.

▲ Plans for the Australian debut of the Tokyo-based The Prince Akatoki Hotel brand mark a return to the local hospitality sector after Japanese groups left the Australian market in the late 1990s.

“So, it's a really exciting time for us to be able to change the hotel landscape and bring more competition.

“But, comparatively, we’re a smaller operator. We’re driven by quality not quantity in each market and, for us, it’s about making key strategic decisions on where we think our brands would be best placed, and how that would work as a return on investment for our owners.”

Taylor said with borders reopened and international tourism numbers improving, there was now “a little bit more surety of the recovery” and, based on early indications and the historical performance of Australian hotels, investors were banking on the sector. 

“Average daily rate growth in some of our key capital cities, and even in some of our regional areas, has already exceeded 2019 levels,” she said.  “Occupancy is another matter, that’s still quite a way to recover to 2019 levels but it will not take too long.”

The centrepiece of the group’s expansion in the Australian market is the introduction of the The Prince Akatoki Hotel brand, which in more recent times has been lauded for its retrofitted London property near Marble Arch.

“It's a flagship property that we are very keen to mimic here,” Taylor said. “That’s a major priority for us.

“The Prince Akatoki Hotel brand is our five-star luxury offering and it really epitomises the execution of the western-style and Japanese design aesthetic fusion that really creates a unique experience for our guests that's not really seen elsewhere in the market.

“And the service sentiment behind that is really built on the premise around the art of Japanese hospitality.”

▲ The Australian market is a key focus of the hotel group's plans to expand its global portfolio from 84 locations to 250.

Of the group’s other two new brands—described by Taylor as the “cornerstone” of StayWell’s expansion—Park Proxi is spruiked as an innovative concept in hotel management aimed at minimising brand compliance in a bid to create “a truly local hotel experience”.

Taylor said its location focus was “upbeat neighbourhoods” in CBD fringe suburbs.

Park Regis by Prince is touted as an “accessible” premium fusion of StayWell’s existing Park Regis properties with Prince Hotels’ Japanese hospitality heritage.

But Taylor said as well as debuting its new brands in the Australian market, significant capital from Seibu’s divestment of 31 hospitality assets earlier this year was being recycled for upgrades to its existing properties.

“For us, it's not only about introducing new brands into this market, but also we're looking to allocate considerable funds to upgrade our existing products to meet market expectations … to be more modern, to be more technologically advanced.

“So, we're really wanting to bring those up to the same standard as these new brand offerings that we're bringing into the market.”