ACCOR Asia Pacific is taking a punt on north Queensland's economic fortunes, striking deals to manage two regional hotel developments.
Accor has won the management contract for a 108-room Ibis Hotel in Townsville, and an 80-suite Mercure property to be developed in Mackay.
The hotel company is filling in the dots in north Queensland and by the end of next year will operate 12 hotels and hostels there.
Further down the coast, it also hopes to snare the management of Thakral's recently acquired Sheraton Brisbane for its upmarket Sofitel chain.
Thakral tendered for a new manager after buying the 410-room five-star property last month.
Accor is upgrading another Thakral-owned hotel, at Broadbeach on the Gold Coast, to a Sofitel and has two others coming out of the ground at Noosa and Palm Cove.
But Sheraton will fight hard to keep hold of the Brisbane property and competition from other hotel operators is likely to be fierce.
Thakral's managing director told The Australian last month that he had an "open mind" about the process.
Nevertheless, Accor has been busy building its Queensland network. Yesterday it announced it would manage the three-star Ibis Hotel Townsville when it opens late next year. The hotel is being developed by Melbourne-based Warren Thompson. He recently sold his backpacker hostel in Townsville's Transit Centre to Accor's joint-venture operation base Backpackers.
Accor Asia Pacific's managing director Michael Issenberg said Townsville's economy was very healthy, with an annual growth rate of 6 per cent, driven by a strong manufacturing base and rapidly improving agricultural and mineral sectors.
He said the new hotel, on Palmer Street, would be the first new internationally branded hotel in Townsville for many years.
Another Queensland developer, John Cowley's Cougar Developments Group, is building an 80-suite hotel at Mackay. Construction on the $30 million development is slated to start next year, for completion in 2006.
Accor will manage that property, located between Wood and Gregory streets, as the Mercure Grand Suites Mackay.
The French-backed hotelier has concentrated its growth in the mid-market hotel sector.
These hotels have fared better than their upmarket peers in the tough trading conditions of the past three years.
Accor Asia Pacific's chairman David Baffsky told an Australia-Israel Chamber of Commerce lunch this month that the nation's tourism industry was at a "tantalising point" in its history.
"No other industry has experienced a more volatile period over the past four years -- from the highs of the 2000 Sydney Olympics through to the lows of SARS and terrorism."
Mid-market hotels were Accor's primary focus, because profits were far easier to come by than in five-stars.
Mr Baffsky said the "pyramid of profitability" in the hotel industry was in inverse proportion to the number of stars.
"We deal with a disposable asset," he said. "A bed not sold is gone forever and we have only three levers on our control panel: occupancy, rate and costs."
He said, all other things being equal, the break-even occupancy for a five-star hotel was about 60percent. But economy hotels had a far lower benchmark of 30-40 per cent.