Hotel Totto opening shows we're not in Kansas anymore

The opening of Hotel Totto, a very rare investment in new hotel stock in the last 15 years in Wollongong, was celebrated this week.

Totto, situated on Market Street, was originally developed by Accor Asia Pacific 15 years before its time. Perfect location, great product, unfortunately at that stage, we didn't have the required visitation to support it.

Fast forward to 2019, the visitor economy of Wollongong was worth nearly $1 billion to the local economy and we welcomed five million visitors into Wollongong at which point our city was well known as the best business case for new hotel development in Australia.

It has taken a long time for Wollongong to understand the value of the visitor economy.

Visitors follow the yellow brick roads to our town and spend money in petrol stations, in newsagents, in hairdressers.

We had a cruise ship visitor we assisted to find a dentist for some urgent repairs.

There is no business in Wollongong that doesn't genuinely benefit from a rise in visitor numbers.

If we have nowhere for them to stay, they head home after enjoying our spectacular natural environments with their wallets firmly stashed in their back pockets.

COVID proved an unwanted distraction but off the back of Wollongong's Olympic moment last September, visitation has boomed and we are welcoming more visitors than ever before.

Our biggest challenge in growing the visitor economy is growing hotel capacity.

How many times have you tried to book a hotel for family or friends to come for the weekend and been astounded by the prices?

There is reason for that, and it isn't because hotel managers walk around wearing Ned Kelly masks taking advantage of people.

Wollongong currently has 1351 rooms, of which 405 are "budget" which are often utilised as emergency and social housing.

Compare that to Newcastle which has more than 3000 hotel rooms within 10 kilometres of their CBD and you can see where the problem lies.

Sadly, the problem is going to get worse before it gets better.

Of the 1351 rooms currently operating, 347 are likely to be lost to residential development in the very near future, based on the zoning of their land, leaving us with right on 1000 rooms when we are already struggling for capacity. That is why developments and investments like Totto are critical.

On top of Totto, we have 70 serviced apartments currently under construction on Young Street and the region's first five-star hotel is being built at the Marina, Shell Cove, a world class example of a tourism infrastructure.

Thirty years in the planning, the marina has already become not only a new driver of visitation for the region but a perception changing project which has put Shellharbour on the national and international agenda. These kinds of projects, like hotels, take significant planning time and that is why we need to start now.

Not talk about why we should; put a line in the sand, pick out sites and make sure the industry knows we are open for business.

Where do we start?

Hotels need to be built on prime foreshore and CBD land; there are very few parcels of land available in these areas and when they are, competitive tension with residential development which is always the highest and best use for a developer, means we are unlikely to see hotels come out of the ground.

The exception is where government zones land for the exclusive use of tourism development and ensures that tourism developments are built, or identifies publicly owned sites and prioritises hotel development specifically on those sites.

Two specific parcels of land with significant tourism development potential are currently undergoing master planning or expressions of interest process - the WIN Entertainment Centre precinct and Kully Bay at Warrawong.

It is critical to the future of the visitor economy that both processes include new short-term accommodation options on the sites.

When Dorothy uttered that famous quote in the Wizard of Oz about not being in Kansas anymore, it was a reference to undergoing a new experience. Like Dorothy, we are in a situation beyond normal.

To navigate our way down this road we are going to need some swift action and be prepared to be adventurous to ensure our region is best positioned to continue to capitalise on our growing visitor economy.