Developer bets big on Melbourne with new Crowne Plaza
Property developer Ross Pelligra has opened an upmarket Crowne Plaza in Carlton in partnership with IHG Hotels & Resorts, backing Melbourne's long-term prospects even as he concedes the city is sitting at a low point for commercial confidence.
The 107-room property, the suburb's first internationally branded hotel, opened on Monday on the site of the former Rydges on Swanston, which Pelligra bought for $35 million in 2020 after the state government had used it for mandatory COVID-19 quarantine.
"Melbourne's only got one way to go, is up," Pelligra told the AFR at the launch.
The opening comes against a difficult backdrop for the Victorian economy. State debt is forecast to approach $200 billion, CBD office vacancy sits at a three-decade high, and residential property prices fell 2.6 per cent over the June quarter as the housing downturn continues. Despite this, Pelligra argued the state's fundamentals remain sound.
"Melbourne is in a bit of a low trough," he said. "Victoria, it's growing, but certain areas and certain sectors will grow faster and slower. One of the things that we specialise is in distressed assets, but I don't think Victoria's distressed. It just needs growth. It needs people to be positive. Stop worrying about what happened yesterday. Worry about tomorrow."
Pelligra, who also owns A-League club Perth Glory, has a string of Melbourne projects underway, including the first Australian outpost of London wine club 67 Pall Mall in the CBD and an industrial estate development in Campbellfield.
The launch comes as Victoria contends with wider business criticism, having been ranked by the Business Council of Australia as the country's worst jurisdiction in which to operate. New work-from-home mandates that require large employers to allow staff to work remotely at least two days a week from September, extend to small businesses from July next year and have added to industry unease. Hospitality figure Chris Lucas has previously labelled the policy the most cynical political stunt he's witnessed, while Luxury Escapes chief Adam Schwab has likened it to a dagger through the heart of the state's business community.
Melbourne Lord Mayor Nick Reece, who attended the Crowne Plaza opening, also voiced opposition to the legislation. "We think these are decisions that are best made in workplaces to suit individual workplaces," he said. "We think working in person is good for people, good for employees, and good for businesses, and it's certainly good for the city."
IHG's Australasia managing director Matt Tripolone struck a similarly upbeat tone on the sector's outlook, saying the group is in talks to bring more of its 21 brands into the Melbourne market. "We're still talking to developers about more hotels in Melbourne," he said. "There's no shortage of opportunities in Melbourne. I assume responsibility of finding the right [brands]. Projects still need to stack up. That's still being supported in Melbourne."
The push forms part of a broader IHG expansion in Australia, which includes new luxury InterContinental properties in Melbourne, Canberra and Sydney, the revival of its Regent brand after a two-decade absence, and the planned repositioning of Melbourne's existing InterContinental into a Regent. "To reposition and change your brands in a hotel is millions and millions of dollars. We don't do it lightly because it's a big investment," Tripolone said. "Nationally, the [hotel] sector's never been this strong. It's actually quite a reasonably strong story down in Victoria as well."
Jonathan Jackson, 15th July 2026
