[COM] Adelaide Oval Hotel

[Ser Noit of Loit]

Thank goodness there are building projects in Adelaide going on we can focus on instead of how much we all seem to piss each other off. I've seen a lot of cases on this forum, a lot more than others, where someone gets personally offended because someone likes a building they don't or someone has a different opinion. Perhaps I've been one of them.

Now onto this hotel.

[HiTouch]

Thank goodness there are building projects in Adelaide going on we can focus on instead of how much we all seem to piss each other off. I've seen a lot of cases on this forum, a lot more than others, where someone gets personally offended because someone likes a building they don't or someone has a different opinion. Perhaps I've been one of them.

Now onto this hotel.

Well I guess it wouldn’t be Sensational Adelaide without a couple of sensational contributors. However, in saying that, there’s no need for harassment and hatred. It’s just a building forum afterall.

As I said previously, I’m not a fan of this hotel but is there any projected amount of revenue if it does go ahead?

[Jaymz]

I found it laughable when the SMA said they were needing to find other revenue streams in order to make it more affordable for ppl to go to the footy/cricket.
I for one will definitely be putting the microscope on ticket/food/drink prices if and when this hotel gets built. Maybe they said it as a sure fire way to gain some
public support amongst the average punter. But let's be realistic here, it's very unlikely prices of anything will be lower in the future.

Also, I've been an Adelaide Crows member ever since the AO redevelopment and the eastern gate is where I enter. Not really looking forward to it being a construction site TBH.
That's more of just a personal gripe of course.

[Waewick]

It would be interesting to see if this was ever stopped.

The ramifications would be worth the read.

[Nort]

How's this for a compromise:

Hotel is allowed to go ahead with government funding support, but any profits from it are put towards enhancing the parkland.

If the development is actually as they say about making the oval a more unique destination then they should be happy with it being allowed to go ahead with conditions like that. It would also send a message to both sides that the parklands aren't static empty land to be preserved exactly as is, but that any development is to have the goal of making them a better public space.

[Mpol03]

I quite like this idea. Money and investment in the parklands are needed to make them a vibrant addition to our city.

[JAKJ]

How's this for a compromise:

Hotel is allowed to go ahead with government funding support, but any profits from it are put towards enhancing the parkland.

If the development is actually as they say about making the oval a more unique destination then they should be happy with it being allowed to go ahead with conditions like that. It would also send a message to both sides that the parklands aren't static empty land to be preserved exactly as is, but that any development is to have the goal of making them a better public space.

An interesting idea but you are creating a development back-door e.g. next proposal is to turn the aquatic center into a Casino, as long as profits go to the parklands (a lot of ways to make money even if you are donating all of your "accounting profits" so I'm sure someone would jump at it).

The parklands do need more funding, there have been impressive strides made in the beautification and watering of the parklands in the past decade that are very visible every time you land at Adelaide airport, but more could be done. I think getting the bordering councils to contribute to the up keek would be a first step, if not also a state run government levy. If they have national heritage significance, funding on a Federal level should be pursued as well.

[HiTouch]

That's a great idea Nort, seriously. It would make the parklands 100% better and would overall make the area feel more attractive.

I hate to say it though but the only reason they're doing this hotel is because of the average financial situation of Oval. It says on their website that the point of the Oval Hotel is to "help offset the ongoing costs associated with operating and maintaining the stadium". It must not be a good situation if that's the reason. As much as I love your idea Nort, the only reason for this hotel is a quick buck. If they actually cared, the hotel would architecturally look a lot better than this proposal.

[Waewick]

That's a great idea Nort, seriously. It would make the parklands 100% better and would overall make the area feel more attractive.

I hate to say it though but the only reason they're doing this hotel is because of the average financial situation of Oval. It says on their website that the point of the Oval Hotel is to "help offset the ongoing costs associated with operating and maintaining the stadium". It must not be a good situation if that's the reason. As much as I love your idea Nort, the only reason for this hotel is a quick buck. If they actually cared, the hotel would architecturally look a lot better than this proposal.

Don't believe everything you read on websites.

The setup of the stadium via the SMA is incredibly flawed. Both SANFL and SACA need to suck every dollar out of the stadium they can.

Both AFL clubs have been basically selling out so AFL attendance growth is limited, the have got prices for food and drink as high as humanly possible. Revenue from the actual stadia would be peaking - now imagine if the Crows and or Power have a few bad years?

So how else do they find new cashflow? This is clearly 1 option.

[bits]

SMA, SANFL, SACA and every decent business attempts to make more money.
There is no level they have the correct amount of money. Given funding they would expand forever. SANFL could easily decide it is for them to fund training every human in the world for SANFL rules football.
SMA will never hit a point they don't want more money. They will bank surplus for rainy years or expand to spend the money.

The hotel being to better SANFL and SACA is just a sweetener, SMA is allowed to run a hotel and make profit on Gilbert St if it wants to. They are only doing it at Adelaide Oval because SMA believes it will make them more money. Likely due to the free kicks of exclusive use of a premium land and exclusively attached to a world class complex they did not have to build.

Once the hotel is built SMA will not sit on their hands and say "job done" they will look for the next thing they can make money on. Maybe a theme park attached to the art gallery on North Tce could make money and you could sell the entire deal as for extra tourism.

[how good is he]

I think the figures are the AO/the stadium needs $2m a year for on-going maintenance costs [& rising every year]. Based on say 22 days for AFL games, 7 days for Strikers home games, 1 day for A league add say 22 days for everything else - test/limited overs cricket/concerts/events/any finals so say 52 days a year or one day a week on average the oval is used. So they need to average say $40k - $50k profit per event to break even.

[Honey of a City]

I think the figures are the AO/the stadium needs $2m a year for on-going maintenance costs [& rising every year]. Based on say 22 days for AFL games, 7 days for Strikers home games, 1 day for A league add say 22 days for everything else - test/limited overs cricket/concerts/events/any finals so say 52 days a year or one day a week on average the oval is used. So they need to average say $40k - $50k profit per event to break even.

They also get revenue from concerts, multiple corporate function venues within the site, rent from the Hill of Grace restaurant, roof climb, and catering and beverage leases.

[Jaymz]

I think the figures are the AO/the stadium needs $2m a year for on-going maintenance costs [& rising every year]. Based on say 22 days for AFL games, 7 days for Strikers home games, 1 day for A league add say 22 days for everything else - test/limited overs cricket/concerts/events/any finals so say 52 days a year or one day a week on average the oval is used. So they need to average say $40k - $50k profit per event to break even.

They also get revenue from concerts, multiple corporate function venues within the site, rent from the Hill of Grace restaurant, roof climb, and catering and beverage leases.

Yep. The company I work for held their AGM in the southern function room a couple years ago. I attended an AFL Grand Final day function there last year etc. etc. etc.
They have multiple sources of revenue, i'm sure the SMA is hardly short of a buck.

[how good is he]

Not entirely true..yes I agree there are other cash flows but my point is based on the on-going maintenance of $2m they need an average of $40k a week profit for the sinking fund/to break even.
If anyone wants to see the below -
SMA lost $519,200 - Oct 2017 financial results
Better 2018 profit of $2.9m but $5.5m in maintenance costs ($100k+ per week).

https://www.audit.sa.gov.au/LinkClick.a ... nload=true

[how good is he]

Adelaide Oval management reveals financial details, says it needs new revenue streams
Paul Starick, Daniel Wills, The Advertiser
February 3, 2019 10:09pm
Subscriber only
SMA to refer hotel to Feds to save city council ‘the trouble’
SANFL support for Oval hotel, council seeks legal advice to stop it
Oval hotel would risk planned, existing hotels: Council
Detailed plans for Oval hotel released
Adelaide Oval hotel gets development planning approval


Adelaide Oval management approached the State Government about building its controversial new hotel almost six months before the ultimate public announcement, and referred to it by the codename “Project X” in an apparent bid to keep the plan under wraps.

As a state parliament committee prepares to investigate the 128-room hotel proposal, a submission from the Stadium Management Authority reveals details about its own financial position and urges development of new revenue streams other than game-day sales in a bid to win the “arms race” with other stadiums.

Emails released by the Government also show that the SMA approached Premier Steven Marshall at least as early as May 30 seeking a meeting over “a major investment opportunity”. Later, on September 24, SMA chairman and former governor Kevin Scarce contacted Mr Marshall’s chief of staff to seek a further meeting on “Project X”.

The public announcement, on November 25, included agreement from the Government to offer the SMA a loan of up to $42 million. To counter claims of a taxpayer “giveaway”, the Government has also published terms of the loan.

Artist impression of the proposed Adelaide Oval hotel.
It shows the SMA will be charged a 4.5 per cent interest rate on money the Government can access at 3.2 per cent, meaning taxpayers will ultimately profit from the deal.

In its submission published online on Sunday night, the SMA says profits from the hotel will be recycled into the stadium’s upgrade and operation.

“A hotel provides such an opportunity and enables an international scale of innovation that keeps Adelaide Oval at the leading edge in the ultra-competitive global stadium and events market,” it says.

It shows the SMA made a $2.9 million audited statutory profit last year but lost $500,000 in 2017. Its turnover was $104 million and $122 million respectively in those years.

The loss was attributed to power costs skyrocketing from $1.5 million in 2016 to $2.5 million in 2017, and warranties expiring on equipment bought for the Oval’s $535 million upgrade, which opened in 2014.

That led maintenance costs to swell from $1.9 million in 2014 to $5.5 million last year.

The submission includes a letter from consultants Horwath HTL that says the proposed 128 rooms are “an increase that is not considered to be a material impact on the future Adelaide hotel market”.

Asked why more revenue was needed when patrons already paid almost $10 for a beer, Mr Scarce said diverse income would “take the pressure off the prices we need to charge to square our books”.

Labor wants the committee to explore whether Liberal Party president John Olsen helped negotiate the loan.