“Centels”—Here to Stay

The austere format of the Mega Shopping Centre is undergoing radical change in design and facilities. A valuable extension to facilities is the addition of “Centels” the luxury international standard hotel accommodation within the centre. The transition from the old generation to the new generation opens the door to embrace the synergies that luxury accommodation will add to the profile and facilities of the new concept shopping centre.

The inclusion of the “Centel” component within the scope of a “Big Gun”—a 45,000 square metres plus centre, delivers a valuable range of comprehensive benefits that complement the core business of retailing, the consumer experience and owners returns. Essential Service Hotels is a hospitality development specialist and has coined the “Centel” term as descriptive of the concept. A recently completed high-level report by Essential Service Hotels into the feasibility and validation of including a hotel component has found an extensive range of benefits. The research commissioned indicated a lift in value to the asset base and a major contribution to the trading viability for retail tenants and owners. The market dynamics in commercial accommodation at this moment indicates that demand exceeds supply in most CBD’s and regional growth areas across Australia. Site cost in prime locations is always a hotel development nightmare, however mega shopping centres have location as a priority feature. Evidence exists that owners are sometimes hesitant in optimising the value of their air space asset in the re-development process. The design of the “Centel” component fits the high-rise model perfectly. The “Centels” concept has been successfully in play for years in Hong Kong with the New World Centre and Pacific Place and now Dubai is creatively extending this concept with the addition of resorts and theme parks in their new shopping centre developments. Whilst the prime GLA is dedicated to the core business of retailing the accommodation components are in strategic secondary areas with access to retailing a positioning criteria. With shopping centre owners wanting to present additional benefits to their retail tenants the aspect of a captive audience on site with shopping, dining and entertainment on their mind adds a real benefit for extended trading. The t-shirt slogan “Shop till you drop” has significance. Essential Service Hotels identified the market mix for the hotel customer base to comprise of the business and leisure traveller with the real bonus being the spending power of the conference market. The fact is shopping, dining and entertainment are at the top of the leisure traveller’s holiday requirements. This is supported by research conducted by Tourism Australia with their latest tourism advertising campaign, the recently launched “Restaurant Australia”. The “Centels” concept is most relevant to the large metropolitan shopping centres, however research indicates that potential exists in regional growth areas where there is a lack of international standard accommodation and the major shopping centre has the potential to add the hotel component to drive extra viability. Essential Service Hotels have conducted extensive research on the “Centel” concept that includes, site appraisal, inventory size , construction and design options, operator models , branding options and financial modeling.

“We have looked at the common ground in consumer trends and their demand patterns and see that the facilities, services ,convenience and safety of combining hotel accommodation within a shopping centre has a definite synergy.”

  The “Centel” concept is perfectly suited to optimize the financial benefits of both the retailers and centre owners and is here to stay. An Executive Summary of our model is available upon request.