Grand Hotel Group has extended its management agreement with Hyatt International for another 10-year.
Hyatt International’s existing management agreement over the Hyatt Regency Adelaide is currently in the 18th year of an initial 20-year term. That agreement included an option for Hyatt International to continue as the manager of the Hyatt Regency Adelaide for a further 10-year period from January 01, 2009.
GHG’s chief executive Simon Barlow said the extension of this agreement is significant for GHG in that it achieves several key objectives affecting the financial performance and flexibility of GHG.
“By extending the management agreement we will retain Adelaide’s leading hotel operator,” he added.
Barlow said the renegotiation of the Adelaide management agreement is one of a number of actions taken by GHG in the last few months to position GHG to take advantage of the forecast improvement in trading conditions in the Australian premium hotel market.
Other initiatives include the commencement of a $49 million refurbishment program for GHG’s hotel portfolio, which comprises the Hyatt Regency Adelaide, Grand Hyatt Melbourne, Park Hyatt Canberra and Hyatt Regency Perth, all of which are managed by Hyatt International.
In Melbourne, GHG has commenced the design development of a $37 million refurbishment of its flagship property, the Grand Hyatt Melbourne.
The first stage of the refurbishment will cost approximately $30.4 million with construction expected to start in mid-2007. The refurbishment will be managed to minimise disruption and will take 15 months to complete.
The main aspects of the first stage of redevelopment of the hotel are:
a) redevelopment of the retail plaza and Collins Street facade;
b) refurbishment of the main lobby, restaurant and bar;
c) redevelopment of the main Russell Street entrance, lobby, porte cochere and façade; and
d) creation of additional conference and banqueting facilities on the hotel’s already very successful convention floor.
In addition, GHG will spend approximately $7 million on the refurbishment of more than 200 guest rooms in the Grand Hyatt Melbourne.
GHG will also spend approximately $11.5 million in the 2008 financial year to complete the refurbishment of the three Hyatt hotels in Perth, Adelaide and Canberra.
By Kathryn O’Meara
