Park Hyatt Melbourne to hit the block as Chinese check out

The Park Hyatt in Melbourne. Picture: NCA NewsWire/ David Crosling

While Melbourne has welcomed more hotel openings and developments of late, one foreign investor is expected to offload one of the city’s key luxury accommodation offerings.

The Beijing-based Fu Wah International Group will place the 245-room Park Hyatt Melbourne hotel on the market, according to sources, and the landmark listing is expected to fetch as much as $120m.

Fu Wah International, which has hotels across the region, including the five-star Park Hyatt Auckland, is expected to list the Melbourne landmark early next year.

Fu Wah bought the Park Hyatt Melbourne for about $140m roughly 10 years ago.

The impending sales campaign for the hotel comes as Melbourne’s hotel market battles reduced occupancies and below-par average daily room rates.

“There is … still several years in Melbourne’s recovery arc,” the Dransfield Hotel Futures Report states.

Recent STR research shows that Melbourne’s hotel rate growth was negative 3.3 per cent in the 2024 financial year, compared with Sydney’s hotels, which recorded nearly 4 per cent increases, while Perth recorded a 3.2 per cent growth over the same time-frame.

According to the Dransfield report, Melbourne is having to absorb “significant and prolonged supply additions”.

Fu Wah International, which has hotels across the region, including the five-star Park Hyatt Auckland, is expected to list the Melbourne landmark early next year. Picture: NCA NewsWire/ David Crosling

Melbourne’s current supply wave will take another two years to complete, it states.

Occupancies in Melbourne hotels average about 70 per cent, while in Sydney, average hotel occupancies top 80 per cent.

Fu Wah director Wong Lim could not be reached for comment despite repeated attempts by The Australian.

In 2016, Fuh Wah constructed the Park Hyatt Auckland, which at the time was billed as China’s biggest ever investment in New Zealand’s tourism infrastructure. But sources said the construction of the hotel was beset by cost blowouts.

Fu Wah invested NZ$200m in the 195-room hotel eight years ago.

Hotel consultant Dransfield Hotels and Resorts said while Melbourne’s occupancy rates trailed that of other capital cities, it was in the context of absorbing significant and prolonged supply additions.

“Melbourne achieved the second-highest level of absolute demand growth across all cities in fiscal 2024. As Melbourne’s current supply wave reaches an end in the coming 24 months, occupancy will have an opportunity to grow over the medium and longer terms,” the consultant said.