Burswood Partners with InterContinental Hotels Group

Burswood Limited and InterContinental Hotels Group (formerly Six Continents Group) today entered into agreements for the development of a new Holiday Inn hotel at the Burswood Resort complex, and the establishment of a partnership to manage the new hotel and existing Burswood Hotel.

InterContinental Hotels Group (IHG) will construct the new 291-room, 3½-star hotel on land adjacent to the existing Burswood Convention Centre under a 30-year lease. Construction of the new 'Holiday Inn Burswood' is expected to commence in August 2003 and is scheduled for completion by early 2005. Burswood will construct a 236-bay carpark beneath the new hotel. The total project cost is approximately A$50 million.

Under the Partnership arrangements, IHG will operate the rooms of the new hotel, together with the rooms of the existing five-star, 413-room Burswood Hotel, which will be re-branded 'InterContinental Burswood Resort Perth'. Burswood will operate the food, beverage and meeting room facilities within both hotels through subsidiary company, Burswood Catering & Entertainment Pty Ltd.

IHG and Burswood will earn a fee for the provision of the rooms and food and beverage services respectively. The profits of the Partnership will be apportioned to each of the parties according to their respective interests in the Partnership.

At the end of the 30-year lease, Burswood has an obligation to buy back the Holiday Inn hotel. Burswood also has the first right of purchase should IHG elect to dispose of its interest in the Partnership and new hotel after an initial five-year period.

The agreements are subject to a number of approvals, including the approval of the Western Australian Minister for Racing and Gaming, Liquor Licensing Authority and Foreign Investment Review Board. The agreements are also subject to successful tendering of the hotel and carpark construction contracts.

In addition to benefits for the State's tourism industry, the new development will generate significant local employment opportunities during the construction phase. When fully operational, the new hotel is expected to create approximately 144 new jobs for Western Australia.

Burswood Managing Director, John Schaap, said the venture was strategically important to Burswood and its competitive positioning.

"The partnership will maximise our competitive advantage, particularly in the convention market, by providing the Resort with a more appealing mix of accommodation for conference delegates," Mr Schaap said.

"The combined management of two hotel facilities through our partnership with IHG will create a more diverse hotel offering for Burswood, catering to both mid-level and deluxe accommodation markets."

Mr Schaap said as a fully integrated Resort, valuable synergies would be generated for the business, which would be complemented by Burswood's recent refurbishment and new facilities.

"Greater accommodation and car parking capacity will also allow us to capitalise on opportunities for increasing visitation and meeting peak period demand.

"One of the key advantages is that Burswood will develop a much stronger market position nationally and globally, through the worldwide network and selling power of IHG.

"The partnership will enable us to leverage benefits from IHG's strong global branding, promotion, loyalty and reservation systems to boost our profile and appeal as a corporate, convention and leisure destination," Mr Schaap said.

InterContinental Hotels Group Managing Director Asia Pacific, Patrick Imbardelli, said the partnership agreement would double the size of its hotel portfolio in Perth.

"The opening of Holiday Inn Burswood will position InterContinental Hotels Group as the largest international hotel operator in Perth, with a total of four hotels and 1,074 rooms," Mr Imbardelli said.

"Burswood is the ideal location and venue for InterContinental, one of the world's most renowned luxury hotel brands. By introducing both the InterContinental and Holiday Inn brands to the complex, we can provide a wider choice to business and leisure travellers covering mid-scale to five-star accommodation experiences."