In HM’s 2025 Australasian Development Outlook, Choice Hotels Asia-Pac Head of Investments and Portfolio Growth, Trent Conroy, reveals the key strategies for scalable growth in a challenging environment.
The Australasian greenfield development market continues to witness feasibility challenges, with elevated construction costs, inflation, and tighter lending conditions dampening new supply pipelines.
In this environment, Choice Hotels Asia-Pac is focusing on strategies with lower capital intensity and faster speed to market, like asset repositioning and refurbishment into midscale and upscale brands – this is emerging as a favoured option for many hotel investors.
Our conversion-friendly brands appeal to developers and investors seeking to mitigate the risks and costs of new builds. We see sustained momentum as owners reposition properties into our brand family, leveraging our extensive sales network and loyalty platform.
Our internal analysis has identified over 1,500 independent hotels in Australia as strong candidates for conversion, representing a tremendous opportunity. Unlike ground-up developments, conversions require less capital, can be executed faster and deliver ROI sooner.
Supporting this trend is the evolving landscape of hotel operating models. The rise of white label management from both established and emerging operators has created unprecedented flexibility. Hybrid structures are becoming more common, with owners pairing a Choice Hotels brand with a third-party operator under either hotel management agreement (HMA) or leasehold structures, allowing owners to select the model best suited to their investment strategy and operational preferences.
Investor interest in regional Australia also remains strong, with branded properties often delivering above-average returns in these areas. We’re actively working with investors to unlock value in these markets.
Finally, the growth of multi-unit franchisees within the Choice Hotels network highlights our model’s scalability and operational benefits, with owners, both freehold and leasehold, leveraging centralised operations, cluster staffing models, procurement synergies and greater leverage with lenders. Coupled with support from Choice Hotels, the portfolio effect can unlock compelling financial outcomes.
Amid development constraints, Choice Hotels’ focus on conversions, flexible models, and regional expansion to enable robust, scalable growth is appealing to both first-time investors and experienced groups, positioning the company for continued momentum in 2025 and beyond.