Perth leads strong hotel sector: Deloitte

Perth is leading growth in the Australian hotel market, which has remained strong this year despite poor performance in the Australian tourism sector, according to the latest report by Deloitte.

Hotels were buoyed by increased business travellers as the strong Australian dollar put tourists off.

The overall RevPAR (revenue per available room) is forecast to increase 6% to $94 in 2011 and to $101 in 2012.

In Sydney occupancy rates will finish at 86% despite the opening of the 171-room The Darling in Darling Harbour and the addition of 247 rooms to Meriton’s new Haymarket property.

The expected RevPAR of $163 in Sydney is up 8.7% from 2010. Room rates are expected to grow 10.5% in 2012.

Melbourne is expected to have 80% occupancy rates for 2011 with room rates projected at $181, 4% higher than 2010 rates. In 2012 Melbourne room rates will hit $195 with room occupancy expected at 81.3%, pushing RevPAR up 10%.

Brisbane has had a flurry of building activity, with Meriton marketing 150 short-stay units in its new Riverside Soleil, the Infinity building on Herschel Street expected to follow suit after opening in 2013, a 368-room project on Elizabeth Street to be announced soon, a new 216-room project on Mary Street opening as soon as 2013 and the proposed 400-room Tabcorp hotel at the State Library opening in 2015.

This means a lower occupancy rate for 2011 in Brisbane, and RevPAR is expected at 6.5% for 2011 and reaching 10.7% in 2012.

Perth occupancy rates of 84.5% are expected for 2011 with an 11% growth in room rate to $174. This makes Perth the fastest-growing hotel market in the country, with an expected year-end RevPAR improvement of almost 14% over 2010.

Perth RevPAR is expected to grow 18.6% in 2012 driven by an expected 17% growth in room rate.

“Whilst occupancies are at record levels, development of new accommodation facilities remains difficult in Perth, though recently announced government incentives may see the initiation of some much needed new hotel rooms being constructed,” the report says.

Adelaide continues to attract development despite it being Australia’s smallest hotel market, with the conversion of the CML building by Adabco Pty Ltd and a proposed Medina Grand near the Treasury building expected to open in late 2013, and the proposed airport hotel and a new hotel by the Hines Group in Grenfell Street expected for 2014.

“The proposed new airport hotel would potentially benefit from a significant uplift in travel once the Olympic Dam project gains approval [and] further additions to supply in the Adelaide CBD are likely to result in lower room occupancy levels and hold back growth in average room rates,” the report says.

Adelaide room occupancies are expected at 73% for 2011 and will continue to drop to 72% in 2012. Average room rates will increase 1.6% in 2011 to $144, growing to $148 in 2012.

Darwin 2011 room occupancies will finish at 72%, up from 70.6% last year.

“This upward trend should continue through the forecast period, with only limited supply additions in sight, being six resort rooms in the Sky City project adjacent to the casino in late 2012, and 96 rooms in the Soho project, aiming for completion in early 2013,” the report finds.

Darwin room rates will grow 6% for 2011 to $149, and a further 8% in 2012 to top $160, Deloitte expects.

There’s trouble in Surfer’s Paradise, with Gold Coast occupancy rates expected at 65.9% for 2011, dropping 2.3% from 2010. The expected year-end room rate is $133, just $1 above the 2010 result.

Gold Coast occupancy rates are expected at 66.7% for 2012 at an average rate of $136, representing a modest 3.4% RevPAR growth.

Tropical North Queensland had modest occupancy improvements, “helped by an absence of new supply and possibly also by troubled operations being forced to close their doors, resulting in a (small) net reduction of available rooms in the market,” the report says.

Occupancy will be at 57.3% for 2011 at an average rate of $117 in Far North Queensland, $2 below 2010. In 2012 occupancy rates are expected to reach 60%, although room rates are not expected to grow much until 2013.



Alistair Walsh

Alistair Walsh

Deutsche Welle online reporter

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?