HotelsClare BurnettFri 06 Nov 26
Melbourne Hotel Surge Moves Out of CBD as Airport Plan Greenlit
Melbourne’s hotel expansion is moving beyond the CBD, with a council planning dispute cleared for an airport tower as construction begins on another hotel beside Flemington Racecourse.
The approval for a 164-key hotel at 13 International Square, Tullamarine, will transform two “factory-like” buildings into a “simple” and “efficient” tower of eight storeys.
A ground floor podium with a business centre and gym is included in the plans, which were designed by Hayball and submitted by developer SMA Projects.
The City of Hume rejected the plan when it was submitted earlier this year, saying that the land use caused conflict in the largely industrial neighbourhood.
SMA Projects argued that there was a Mantra nearby in the Commercial 2 zone, with another approved for the site behind the International Square address at 4-6 Trade Park Drive.
The Department of Transport and Planning overruled the council’s objections and granted the permit.
Meanwhile, builder-developer Pace has begun work on the Oakwood Flemington, a 97-key apartment hotel neighbouring Flemington Racecourse [pictured top].
The hotel has been designed by architecture practice Jackson Clements Burroughs with interiors by Cera Stribley.
The Ascott Limited, a wholly owned subsidiary of Singapore-listed real estate investment manager CapitaLand Investment, turned the first sod on the hotel on November 4.
Oakwood is part of Ascott’s global portfolio of accommodation brands. The Oakwood Flemington is expected to open in February, 2028.
Three more hotels are expected to open across Ascott’s Australian portfolio before the end of 2026, including Oakwood Epping in Melbourne’s northern growth corridor.
The Ascott Limited is expanding its footprint across Australia. Quest Southport opened on the Gold Coast in June, while another Quest-branded hotel opened in Canberra in August.
According to Savills, Melbourne CBD’s hotel pipeline was slowing as the market absorbed developments initiated several years ago.
Average daily rates grew 2.2 per cent year-on-year in 2025, with occupancy rising 2.9 percentage points. Savills said this demonstrated “the market’s capacity to absorb new rooms”.
“With supply now slowing, further growth is expected,” it said.
