The City of Karratha is progressing plans to deliver a new, high-quality hotel in the heart of the City Centre, reaffirming our commitment to a vibrant, activated and welcoming CBD.
A Landmark Site in the City Centre
The hotel is proposed for Lot 7078 Sharpe Avenue, part of The Quarter precinct. —The land was originally acquired by the City from DevelopmentWA in 2018 with the intent of establishing a hotel on this strategically located site. The area sits at the centre of Karratha’s civic, commercial and cultural activity, making it a prime location for new shortstay accommodation that supports both business and leisure travel.
A Renewed Call to Market
While the City had previously reached agreement in 2018 to deliver a 100 room, four star hotel, shifting economic conditions — including escalating construction costs, labour shortages and COVID19 impacts — prevented the project from proceeding at that time. With market conditions stabilising and strong demand for quality accommodation continuing, the City is now retesting the market through a formal Expression of Interest process.
This process ensures a transparent, competitive pathway to identify the best development partner while protecting ratepayer interests. Proposals received will be evaluated and presented to Council for consideration.
Why a New Hotel Matters
- Delivering a flagship hotel at The Quarter will:
- Strengthen the attractiveness of the City Centre for visitors, investors and events.
- Increase shortstay accommodation supply to meet growing demand.
- Support local businesses by bringing more activity into the CBD.
- Enhance the city’s long-term economic resilience.
The City recognises the value of a high‑quality hotel as a catalyst for broader precinct activation. Lot 7078 is a prime location, and the project represents a major opportunity to support the City’s ongoing growth and vibrancy.
Next Steps
The City is now seeking proposals from qualified hotel developers to bring this long planned project to life. Once the EOI period closes, submissions will be assessed against key criteria including design quality, financial sustainability, and alignment with the City’s vision for The Quarter.
Bringing a new hotel to the Karratha City Centre has long been a shared ambition—and each step forward helps build a more dynamic, liveable and prosperous city.
Link to Open Tender
Documents
Timeline
EOI Open
March to May 2026
Proposals shortlisted by Council
June 2026
Negotiation with preferred developer and execution of MoU
July 2026
Drafting of Major Land Transaction Business Plan
August 2026
Public advertising of Business Plan
September to October 2026
Final Investment Decision from Council
September 2026
Why is the Council running an Expression of Interest (EOI) for a hotel?
The land at The Quarter was acquired from DevelopmentWA in 2019 at a significant discount. As part of that agreement, a restrictive covenant was placed on the site requiring it to be developed specifically for a hotel.
The EOI process allows the City to test whether the market is now ready for a viable hotel development that would meet this covenant.
How much will this cost the City?
The City has not committed any funding to constructing a hotel at The Quarter. The purpose of the EOI is to understand market interest, with a strong preference for proposals that are fully self‑funded by the developer. If a proposal requires some form of City contribution, Council will consider negotiating commercial terms that provide value to the community.
Don’t we already have enough hotels in town?
The City currently has roughly 1,200 short‑stay accommodation beds (excluding FIFO/transient worker accommodation). This includes caravan park cabins, backpacker facilities, Airbnbs, and motel/ hotel operators. With major industry investment expected over the next decade — and increased tourism linked to the Murujuga Cultural Landscape World Heritage Listing — the City anticipates a growing demand for short‑stay accommodation, particularly further high‑quality premium options that contribute to the visitor experience of Karratha and it’s surrounds.
Why can’t we keep the site as public green space?
Because of the restrictive covenant on, the land, the site must either be used for a hotel or the City must may be required to pay the full market value of the land to have the covenant removed the covenant. The EOI process helps determine whether there is a viable hotel proposal that meets this requirementexists. Importantly, as part of any future hotel proposal, the City will seek to retain some level of public green space within the site, integrating open areas and landscaping around the hotel footprint to maintain community amenity. At the end of the EOI process, one option available to Council is not to proceed with a hotel and instead pay the remaining market value to DevelopmentWA, allowing the land to remain public green space without restrictions.
What land tenure options are available?
The City owns Lot 7078 in freehold, meaning development proposals may incorporate a freehold transfer, or a long-term lease, for all or part of the site.
What is the City seeking from this development?
The City aims to further activate The Quarter precinct while addressing the gap in premium short‑stay accommodation. Preferred proposals should ideally include:
- Minimum 4star standard
- Circa 100 keys, potentially combining shortstay and serviced apartment offerings
- Street level activation integrated with the existing precinct (e.g., food & beverage, retail)
- Integration with the existing town square
- Retention of some public green space
Is the City looking to revive the previous approved design?
Not specifically. While the previous DA included desirable features – such as a4‑star rating and 100 keys – the site plan, layout and façade do not need to be replicated. Developers are free to propose designs that best align with feasibility, their commercial objectives, and the City’s aspirations.
What financial support is available?
Given the City’s capital intensive Community Infrastructure Plan for the next decade, preference will be given to proposals that are financially self sufficient.
However, the City recognises current market feasibility challenges and is willing to consider:
- Financial support where it enables a desirable outcome
- Nonfinancial or in kind support such as discounted land access or rates concessions
What is the timeline?
The City intends to present all submissions to Council on 25 May 2026 for selection of a preferred proponent.
Following that:
- Terms will be finalised and an MOU executed.
- The City must then prepare and publicly advertise a business plan.
- The matter will return to Council for final endorsement.
What services and infrastructure exist on or near the site?
When The Quarter precinct was originally developed, this lot was specifically earmarked for a future hotel development. As a result, the site is already serviced with all essential utilities to the lot boundary, ensuring a strong foundation for development.
The City can provide more detailed information regarding the exact location and capacity of existing services to support detailed design work as proposals progress. However, potential proponents are also encouraged to undertake their own enquiries into the level, condition, and location of servicing infrastructure to ensure their submissions are fully informed and technically robust.
How will proposals be assessed?
Proposals will be assessed against several qualitative criteria. All required information must be contained within the submission, as the Evaluation Panel will not rely on any prior knowledge of the respondent.
Value for Money – Assessment will consider the project summary, commercial principles and indicative budget, proposed financial structure and any City contribution, identified financial risks and mitigation strategies, and the proposed legal and commercial arrangements. While the City will consider proposals that require a financial commitment to achieve feasibility , there is a preference for projects that are financially self-sufficient or capable of providing an appropriate return on City investment
Strategic Fit – Proposals must demonstrate alignment with the Development Objectives, State Planning Policy 7.0, the City’s Council Plan and Local Planning Strategy, sensitivity to environmental and neighbourhood context, and community benefits delivered by the project.
Relevant Experience – Respondents must provide evidence of experience delivering and managing similar facilities in Australia or internationally.
Methodology – Evaluation will consider the proposed project timeline, clarity of roles for the respondent, the City and partners, and any strategic initiatives or innovative technologies proposed.
Capacity to Deliver – Respondents must demonstrate financial and resource capacity, availability of resources in current market conditions, proposed partnerships with industry, government, Aboriginal groups or local businesses, and reasons why the proposal is positioned for success.
What planning approvals will be required?
Before approval to proceed, any development will require:
- A Development Application (DA) in accordance with the local planning scheme
- Compliance with relevant State planning policies
- Engagement with the City’s planning team to confirm design expectations
Are there any constraints or design considerations?
Designs should address the key matters identified for this precinct in the City’s Planning Scheme. This includes ensuring strong interface and activation of the adjacent public open space and broader public realm, achieving appropriate built‑form outcomes—such as zero‑lot designs where suitable—using locally appropriate materials and finishes, and minimising the visual and operational impact of services, access, and other functional requirements.
Can developers partner with other operators or investors?
Yes. The City welcomes and encourages collaborative delivery models. Developers are free to form partnerships, joint ventures, or consortium arrangements where doing so strengthens the commercial viability, design quality, or operational capability of the proposal.
Partnerships may involve:
Hotel or accommodation operators who can provide branding, management expertise, or established market presence.
Equity investors who can improve financial capacity and support delivery.
Construction or modular specialists who bring technical expertise or innovation.
Local businesses or service providers who can enhance precinct integration and activate the groundfloor environment.
Collaborative proposals should clearly outline the roles, responsibilities, and experience of each party, along with evidence of commitment between partners (e.g., MOUs, letters of intent, or partnership structures). The City is open to flexible delivery arrangements, provided the approach supports a highquality outcome and aligns with the broader vision for The Quarter precinct.
What are the expectations around community engagement?
No community consultation is required from proponents as part of the initial EOI submission. At the City level, a statutory public consultation process will be required under the Local Government Act before any project can be fully endorsed to proceed. Depending on the final proposal, there may also be a statutory public consultation process associated with the Development Application (DA) at a later stage. This process ensures that the community is formally notified, given the opportunity to comment, and that Council can consider submissions as part of its decisionmaking responsibilities.
While not required during the EOI stage, proponents may elect to undertake their own community engagement activities as the project progresses. These could include earlystage discussions with local residents, businesses, and stakeholders to help inform design refinement; targeted engagement to test project concepts; or broader communication efforts aimed at building brand awareness and establishing positive relationships with future customers. Proactive engagement by the proponent can help identify opportunities, address concerns early, and build community support for the project.