TOURISM INVESTMENT
OPPORTUNITIES
Luxury Hotel in Darwin
City Based and Regional Tourist Accommodation
Frances Bay, Darwin
Lee Point, Darwin Urban Tourism Opportunity
‘Lhilpa’ Red Mallee Nature-based Tourism Accommodation
Immersive Tourist Attractions in Parks
June 2015 | Directory of Investment Opportunities
NORTHERN TERRITORY TOURISM PROFILE
The Northern Territory (NT) has a long established reputation as a unique tourism destination
centred on its extraordinary natural landscapes and rich aboriginal culture. The NT presents an
excellent opportunity for strategic tourism investment, enviably positioned on the doorstep to
Asia, the Territory has the fastest growing outbound travel market in the world.
According to Deloitte Access Economics September 2015, the five year outlook for the NT is a 3.6
percent per annum average annual growth rate, higher than the rest of Australia which is predicted
to grow at 2.6 percent per annum. Tourism is a significant economic driver for the Territory and is
the largest employing industry, providing jobs for over 16,000 people.
The 2013-14 visitor economy is worth approximately $1.61 billion, or 7.7 percent of the total
Gross Value Added (GVA). The NT has a higher reliance on tourism than any other state or
territory in Australia (aside from Tasmania), demonstrated by the higher share of GVA and Gross
State Product (GSP). The visitor economy, which is supported by the tourism sector, includes
visitors who come for different reasons including leisure, business events, corporate travel, to
visit friends and relatives and other purposes.
While the majority of visitors are from across Australia, the NT is also a popular destination with
overseas travelers from the United States, United Kingdom and other European nations.
Currently numbers are lower from Asian countries, however the NT is continually gaining
popularity, with even more Asian visitors expected going forward.
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Directory of Investment Opportunities | June 2014 | 2nd Edition
TOP END
Discover the richness of Indigenous culture and art, trace the region’s dramatic history or
find yourself amidst world-class national parks; the Top End has something for all
appetites. The capital city of Darwin is located on the northern coast and offers a unique
blend of cosmopolitan city and relaxed tropical town, as well as being the gateway to the
unique destinations of Arnhem Land, Kakadu and Litchfield national parks and the Tiwi
Islands.
The warm tropical climate of Darwin and its surrounding area is characterised by two
distinct seasons, the ‘Wet’ and the ‘Dry’. The wet season usually spans from November to
the end of April, with humidity reaching up to 80 percent and an average rainfall of
1615mm during the period. The dry season, in contrast, sees humidity lower at around 60
percent, with rain usually a distant memory.
In the year ending June 2015, the Top End welcomed 926,000 overnight visitors to the
region. Of these 85 percent were domestic overnight visitors, the balance coming from
overseas. Over the last three financial years, an average of 33 percent overnight visitors
came during the peak season of July to September.
Accommodation occupancy rates in Darwin for the 12 months to September 2015 were 81
percent. Average Daily Rate (ADR) was $180 and the Revenue Per Available Room
(REVPAR) at Darwin hotels $146.
CENTRAL AUSTRALIA
In the heart of Australia, the Red Centre offers unique visitor experiences within a semi-
arid region. Appreciate the unforeseen natural rock formations, learn about Indigenous
culture or follow in the footsteps of the early explorers as you discover the many varying
national parks of the region. Central Australia has a lot to offer visitors to the region
supported by the main township of Alice Springs. Home to many tourist attractions, Alice
Springs is a destination in its own right, as well as being the hub to explore the wonders of
the Devils Marbles, Kings Canyon, Simpson Desert, Uluru Kata-Tjuta National Park and
the West McDonnell Ranges.
The climate in Alice Springs and the Red Centre
region is semi-arid. Unlike the wet and dry
seasons of the tropical north, you can expect the
typical four seasons: hot summer days from
December to February, a cool winter from June to
August, and warm days and cool nights during
spring and autumn.
In 2014-15, the Red Centre welcomed 547,000
overnight visitors to the region. Of these 65
percent were domestic visitors, the other 35
percent coming from overseas. Over the last three
financial years an average of 30 percent overnight
visitors came to the Centre during the peak
season of July to September.
LUXURY HOTEL IN DARWIN
Darwin, capital city of the Northern Territory, is Australia’s northernmost capital city, as close
to Singapore and Manila as it is to Sydney and Melbourne. Eight national capitals, 36 trading
ports, 69 international airports and nearly half a billion people are within four hours’ flight of
Darwin.
Being the closest capital Australian city to Asia, and with the shortest transport routes to
Australia’s major Asian trading and business partners, Darwin is a gateway for both domestic
and international tourism and business travelers.
The Northern Territory Government is eager to address the growing demand for luxury
accommodation, hospitality and service in Darwin, by facilitating an integrated luxury hotel
development.
The vision for an innovative and vibrant development of world class standards would attract
investment, and drive long term business and luxury tourist visitation to the Territory.
Darwin has an established reputation as a unique tourism destination and is a modern,
vibrant and cosmopolitan city, which retains its historical relaxed, tropical charm. With its
thriving economy and ongoing interest in the mining, oil and gas sector opportunities within
the region, there has also been strong growth in the business travel sector.
Executive domestic and international business travellers and high net worth tourists are
constrained by the lack of luxury accommodation, hospitality and services that would
optimise their experience in Darwin. According to a recent study by AEC group, only 8
percent of Darwin’s total room stock is categorised as luxury accommodation which is
substantially lower by percentage than other major Australian capital cities (e.g. Sydney where 22 percent of room stock is categorised as luxury).
As at August 2015 there were 7825 short stay
rooms servicing the visitor market. Forecasts
by Tourism Research Australia suggest that
overnight trips to Darwin by international
visitors are expected to increase substantially
by 6.5 percent and by 2 percent for domestic
visitors in the five year period between 201718 and 2022-23.
The development would include a minimum
number of
luxury rooms within
an
internationally-recogonised
hotel
brand,
offering around the clock butler services.
Services and facilities to maximise the
experience of patrons, could also include
recreational
facilities
including
pools,
gymnasium and day spa, boutique retail shops
and services and bars and signature
restaurants.
Potential
variations
Industry advice is that the viability of luxury hotels is strengthened by providing full
service offerings including hospitality, retail and bespoke tourism services. These
offerings need to be easily accessible, but not necessarily all part of the one
business. It may be possible to have a range of partnerships with both local and
international partners to source guests and offer the range of services desired.
Depending upon location, a high quality inner city proposition may be attractive, or
perhaps a high quality, tropical style resort.
Location(s)
The NT Government has identified a 9000m strategically positioned, direct
waterfront site within walking distance to Darwin’s key business and entertainment
centres, including the Darwin Waterfront and Conference Centre. The NT
Government is also willing to consider alternative sites identified by Proponents that
may suit individual proposals. In a CBD type environment there are a number of
privately owned freehold sites, and some publicly owned land that may suit
individual proposals. Outside the CBD the choices are more limited, but there are
some outstanding locations that may suit a high quality, tropical style resort.
Estimated
total cost of
project(s)
2
Depending upon scale, development costs could range from A$50 million to $100
million, plus the cost of land. Industry advice is that the cost of constructing a five
star hotel room in Darwin may range from $500,000 to $550,000. A luxury standard
room may cost significantly more to deliver. Operating costs for a luxury hotel or
resort are expected to be higher than currently experienced in the Darwin market.
Capital sought It is highly likely that a new venture such as a luxury hotel would have to be fully
or required
funded by the proponent. Depending upon scale, capital of A$50 million to $100
million may be required for construction, and the proponent may also need to fund
operating costs for the first few years.
Availability of
supporting
services
The Darwin market has a broad and mature hospitality and services industry, and a
willingness to support new ventures. It may be necessary to supplement local
support with higher skills across a range of services such as language fluency,
customer service, and hotel management.
Type of
investment
available
Privately held land could potentially be purchased with freehold title, or accessed
under a long term lease. Government owned land may be offered under a
development lease, convertible to freehold once certain development conditions
have been met. Development of land and buildings would follow the standard
development approval process.
Ideally suited
to
Proponents would benefit from having a strong balance sheet and a proven track
record in delivery. A brand recognised and valued by the national and international
target markets for the NT tourism industry would be advantageous.
Variables
affecting the
financial
outcome
Collectively, land acquisition, development, construction and project management
costs are likely to be significant upfront costs. Operating costs such as marketing,
food and beverage, room, and other services are likely to be higher than for other
hotels in Darwin reflecting the higher level of personal service expected of a luxury
hotel.
Timeframe
Potential sites are available now, subject to negotiation with existing landowners.
The NT Government owns some suitable sites in the CBD, and in inner suburbs that
could suit urban or resort style hotels and an Expression of Interest process is
currently open. http://www.dcm.nt.gov.au/darwin_luxury_hotel_development
Further
information
Anne Tan
Deputy Coordinator-General
Office of Major Projects, Infrastructure and Investment
Department of the Chief Minister
Email [email protected]
Phone +61 8 8936 4206
CITY BASED AND REGIONAL CENTRE
TOURISM INVESTMENT OPPORTUNITIES
Forecasts by Tourism Australia are that Northern Territory overnight visitation is expected
to increase by 3.9 percent per year in the five year period between 2017-18 and 2022-23.
There are a range of investment opportunities available in Darwin and in the regional
centres to service demand from the growing leisure and business travel market segments.
Investment opportunities span a broad range of options including hotel, motel and
backpacker development, serviced apartments, and innovative leisure attraction
development.
There are a number of well-located privately held sites in and adjacent to the Darwin CBD
and in the regional centres of Alice Springs and Katherine as well as areas of land held by
Government earmarked for mixed use or precinct development with the potential to
incorporate tourism facilities. These Government land areas are at varying levels of
preparation for investment.
Crown land is normally made available through a competitive process. Developers
typically purchase a Crown lease, which is converted to freehold upon satisfying certain
conditions
Potential
Variations
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•
Location(s)
•
•
•
•
•
Estimated
total cost of
project(s)
Variable
affecting the
financial
outcome for a
potential
investor
Investment opportunities span a broad range of options including hotel,
motel, serviced apartments and innovative leisure attraction development.
There are a range of upcoming Government led opportunities for large
scale development projects including mixed use or precinct development
with the potential to incorporate tourism facilities.
Darwin CBD, coastal or waterfront areas.
Regional centres such as Alice Springs and Katherine.
Different sites are available – some with freehold title and some sites may
be available as leasehold.
The majority of potential sites in the central business district already have
the appropriate zoning for tourism development.
Some locations may have restrictions such as total building height,
setback from site boundaries, or the number of car parks required to
support a proposed development.
From small scale investments through to $200 million plus depending on the
project.
•
•
•
•
•
•
•
•
•
•
Land and/or leasing costs
Cost of getting required approvals in place
Construction cost
Time taken to obtain approvals and complete construction
Labour costs
Non-labour operating costs
Expected room revenue
Expected food and beverage revenue
Anticipated forward occupancy projections
Exchange rates
•
Aviation services to the region.
Capital sought
or required
Potential investors may need to fund as much as 30 percent to 50 percent of
the development with equity, depending on the amount of debt available to
support individual projects.
Availability of
supporting
services
The Northern Territory has a broad and mature hospitality and tourism
services industry. Year ending June 2015 the Northern Territory received
1.36 million visitors and as at August 2015 there were 7825 short stay rooms
servicing the visitor market.
Type of
investment
available
•
•
•
•
Ideally suited
to
Direct passive equity investment
Partnership – either financial or management
Joint venture
The nature of the potential investment will be influenced by whether a
specific site is offered for sale, or whether the current site owner wishes
to retain an interest in the final development.
Experienced developers with an established track record, ideally with a brand
recognised and valued by the national and international target markets for the
NT tourism industry.
Investment from overseas is welcomed. The requirements governing foreign
direct investment are overseen and enforced by Australia’s Foreign
Investment Review Board www.firb.gov.au
Timeframe
Further
information
Some sites are available immediately, subject to negotiation with existing site
owners/managers.
Rachel Telford
Tourism Investment Manager
Tourism NT
Email [email protected]
Phone +61 8 8999 1675
DEVELOPMENT IN FRANCES BAY, DARWIN
This potential development in Frances Bay will be a unique and exciting opportunity to
produce a landmark mixed use marina development that will transform and revitalise a key
inner city area.
Frances Bay is located only one kilometre from the Darwin CBD and currently home to the
region's commercial seafood and marine industry.
Darwin is the Territory’s capital. It is centrally located on Australia's northern coastline and
is the country's gateway to Asia. It is fast becoming the location of choice for businesses
and service industries looking to profit from Darwin's reputation as a logistics, service and
supply hub for Australia's northern region and export markets.
The site's foreshore location and proximity to the CBD provides great potential for an
integrated development comprising a number of land uses relating to marine industry,
wholesale and retail fish markets, tourism, harbourside living and public open space
amenity. The site has the potential to become a premier address, a tourist feature and a
commercial hub.
The Department of Lands, Planning and the Environment is considering the release of
approximately 20 hectares of Crown land located in Frances Bay for development.
Market sounding has been undertaken to gauge market interest and seek information
from interested developers and/or operators to inform the Territory on issues and matters
related to any future release of the site for development.
Developers and/or operators who have an interest in developing the site were highly
encouraged to participate in the market sounding process.
It is important to note that no decision has been made in regards to the future of the site
and therefore there is no immediate change to the operations within the Frances Bay
Mooring Basin.
Potential
variations
Any future development of the site is envisioned to produce a mix of integrated land
uses related to marine industry, tourism and harbourside living, including the
enhancement and ongoing operation of the Frances Bay Mooring Basin.
This is in accordance with the vision for the area under the Frances Bay Area Plan and
Planning Principles (Part 8, 14.1.3) within the NT Planning Scheme and the Darwin City
Centre Master Plan.
Location(s)
The site comprises Crown land known as the Gobi Desert, the Frances Bay Mooring
Basin and the adjoining seabed.
The site does not include the Fisherman’s Wharf and the Hornibrooks Wharf.
Market
sounding
process
The market sounding process closed on the 30 September 2015.
Timeframe
An announcement regarding the future of the site is expected in 2016.
Further
informatiom
Land and Economic Development
Department of Lands, Planning and the Environment
Email [email protected]
Phone +61 8 8924 7332
www.lands.nt.gov.au/FrancesBay
URBAN TOURISM OPPORTUNITY
A prime opportunity for one or more high quality four or four and a half star tourism
accommodation facilities along with hospitality, niche retail, recreation and services to the
leisure and business traveler markets.
Located on the northern edge of urban Darwin, adjacent to Casuarina Coastal Reserve,
the Lee Point area is one of the most significant developable areas remaining along the
coastline within close proximity to the Darwin urban area.
The site is highly accessible from Darwin Airport and located in proximity to nearby
infrastructure including Charles Darwin University, Royal Darwin Hospital and Casuarina
Shopping Centre. There are opportunities for view lines along the coast and to the sea.
A number of sites will become available for development of tourism accommodation and
hospitality services in a main street format. Crown land is normally made available
through a competitive process. Developers typically purchase a Crown lease, which is
converted to freehold upon satisfying certain conditions.
Potential
variations
•
•
•
•
Location(s)
•
•
•
Estimated
total cost of
project(s)
Variable
affecting the
financial
outcome for a
potential
investor
A full-service offering including hospitality, retail and tourism service within
close proximity.
A mixed use development incorporating a mix of serviced apartments, retail
and food hospitality may also be viable.
A mixture of standard and medium density residential developments with a
component of holiday rental accommodation.
A Bali style holiday village may also be commercially attractive to potential
investors.
Located on the coast in Lee Point, approximately 14km north of the Darwin
CBD, the location has significant frontage to an arterial road and potential
access to the coast.
Lee Point has a range of positive attributes as a location for tourist
accommodation, including an easily developable parcel of land, coastal
location, proximity to infrastructure and potentially attractive view lines.
Royal Darwin Hospital, the largest hospital in the NT, is located in close
proximity to the southern boundary of the site. Other nearby uses include the
Lee Point Village Resort offering a caravan park, cabins and camping ground,
as well as recently-completed motel rooms.
From A$50 million to $200 million depending upon the size of the development
and the quality of construction and design.
•
•
•
•
•
•
•
Land and/ or leasing costs
Cost of getting required approvals in place
Construction cost
Time taken to obtain approvals and complete construction
Labour costs
Non-labour operating costs
Expected room revenue
TOURISM
LEE POINT , DARWIN
•
•
•
•
Expected food and beverage revenue
Anticipated forward occupancy projections
Exchange rates
Aviation services to and from Darwin.
Capital sought
or required
Potential investors may need to fund as much as 30 to 50 percent of the
development with equity, depending on the amount of debt available to support
individual projects.
Availability of
supporting
services
The Darwin market has 7,825 short term accommodation rooms, and a broad and
mature hospitality and tourism services industry that attracts over one million
overnight stays by visitors per annum.
Ideally suited
to
Experienced developers with an established track record, ideally with a brand
recognised and valued by the national and international target markets for the NT
tourism industry.
Investment from overseas is welcomed. The requirements governing foreign
direct investment are overseen and enforced by Australia’s Foreign Investment
Review Board www.firb.gov.au
Timeframe
Further
information
Sites suitable for tourism purposes are expected to be released through an
expression of Interest process in 2015.
Rachel Telford
Tourism Investment Manager
Tourism NT
Email [email protected]
Phone +61 8 8999 1675
The NT offers a diverse range of nature-based tourism experiences. There is a strong
demand for high-end luxury accommodation located in inspiring locations across the
NT.
The NT Government has instigated a pre-approval process designed to significantly
shorten the length of time it requires for a nature-based tourism accommodation
development to be approved. Hydrology reports and sacred sites approvals have been
sourced and negotiations are advanced with Traditional Owners.
Extensive planning has occurred and is ongoing for a location bordering Finke Gorge
National Park in Central Australia, 140 kilometres west of Alice Springs. The proposed
site is close to the settlement of Hermannsburg.
Potential
variations
•
•
•
•
Location(s)
Finke Gorge, Central Australia.
Estimated
total cost of
project(s)
A$5 million to $15 million.
Capital sought
or required
Potential investors may need to fund as much as 30 to 50 percent of the
development with equity, depending upon the amount of debt available to support
individual projects.
Availability of
supporting
services
Type of
investment
available
Ideally suited
to
A key location with 270 degree views of the surrounding valleys
Ideally suited to an immersive nature lodge of up to 40 rooms
A number of design options are available for the site, sympathetic to the location
There may be opportunities for investors to plan and establish individual
facilities, before selling or leasing management rights to another company/
operator.
Tourism NT and Tourism Central Australia have a number of marketing resources
able to support a lodge once it has been developed. Local traditional owners may
also be able to provide assistance with developing the visitor experience.
•
•
•
Direct passive equity investment
Partnership – either financial or management
Joint venture.
Existing nature-based tourism accommodation providers, and/or a company/
individual with previous experience in developing accommodation in remote areas.
TOURISM
‘LHILPA’ RED MALLEE NATURE
BASED TOURISM ACCOMMODATION
Variables
affecting the
financial
outcome
•
•
•
•
•
•
•
•
•
•
•
•
Land and/ or leasing costs
Cost of getting required approvals in place
Construction cost
Time taken to obtain approvals and complete construction
Labour costs
Non-labour operating costs
Expected room revenue
Expected food and beverage revenue
Anticipated forward occupancy projections
Exchange rates
Fuel costs
Aviation services to/from Darwin and/or Alice Springs.
Timeframe
Invitation for Expressions of Interest will be released in November 2015.
Further
information
Rachel Telford
Tourism Investment Manager
Tourism NT
Email [email protected]
Phone +61 8 8999 1675
IMMERSIVE TOURIST
ATTRACTIONS IN PARKS
Over 1.3 million overnight trips are taken in the NT every year, with visitors experiencing
the adventure of wilderness and unforgettable natural beauty against a backdrop of the
world’s oldest living culture. Providing immersive tourist attractions to complement this
extraordinary tourism experience will unlock the full visitor potential in these areas, while
contributing to the conservation of our natural environment.
National parks and reserves are already a major draw card for visitors, annually hosting
in excess of 2.8 million visits from Territory residents, and interstate and international
visitors. Investment that creates new opportunities for tourists could attract many more
visitors.
The NT Government is open to commercial proposals that seek to deliver benefits across
a broad range of stakeholders, including the proponent, Parks and Wildlife Commission
of the NT (PWCNT), traditional owners (where applicable), the tourism sector, residents
of the NT and visitors to the parks and reserves.
Generally, commercial activities undertaken within a park or reserve will attract a fee or
royalty. These may be payable to the NT, PWCNT, an Aboriginal land trust or the joint
management partners. The specific amounts payable for fees or charges will be
negotiated if and when a detailed proposal is accepted.
Potential
variations
Location(s)
•
Installation or construction of infrastructure on parks and reserves, for example,
accommodation facilities, restaurants, cafes, kiosks, campgrounds, walking and
biking trails, zip lines, helipads, sky rail, playgrounds and swimming facilities.
•
Development of new and unique tourism or ecotourism ventures and experiences
(with or without supporting infrastructure).
•
Utilisation of existing infrastructure for new commercial enterprises.
•
Creation of new experiences to be conducted on parks and reserves (including
events or festivals).
•
Reinvigoration of existing experiences, including campground management.
•
Private management or operation of the whole or part of a suitable park or reserve.
•
Enhancement of the tourism and recreation experiences through any other activities
or development of commercial opportunities.
There are 87 parks and reserves under the management of the PWCNT, some of which
are managed in partnership with Aboriginal traditional owners. While the priority of the
PWCNT and its partners is to protect these landscapes for future generations, there is
opportunity to bring tourism-based commercial project ideas to fruition with the full
support of the NT Government.
Uluru Kata-Tjuta National Park, Kakadu National Park (both managed by the Australian
Government) and the Territory Wildlife Park fall outside the scope of this process.
Estimated
total cost of
project(s)
The NT already has a broad and mature hospitality and tourism services industry.
Variable
affecting the
financial
outcome for a
potential
investor
Availability of
supporting
services
Ideally suited
to
•
•
•
•
•
•
•
•
•
•
Land and / or leasing costs
Cost of getting required approvals in place
Construction cost
Time taken to obtain approvals and complete construction
Labour costs
Non-labour operating costs
Anticipated forward usage projections
Exchange rates
Fuel costs
Aviation services to and from Darwin.
The NT already has a broad and mature hospitality and tourism services industry.
Proponents should be able to demonstrate experience or capability in operating
commercial tourism or recreation enterprises and have financial capacity - either
individually, in partnership or through a joint venture - to develop and operate the
proposed enterprise or activity.
Investment from overseas is welcomed. The requirements governing foreign direct
investment are overseen and enforced by Australia’s Foreign Investment Review
Board www.firb.gov.au
Timeframe
Some sites are available immediately, subject to negotiation with PWCNT
management.
Further
information
Mark Crummy
Director
Parks and Wildlife Commission of the Northern Territory
Email [email protected]
Phone +61 8 8999 3826
www.nt.gov.au/parkseoi