Queensland hotel market set for recovery in 2012 after bad year: CBRE

The Queensland hotel market is due to recover after recent poor performance, particularly in sites like the Gold Coast and Sunshine Coast, according to the latest report by CBRE.

Queensland’s hotel market should grow 5.2% from 2012 to 2016, outperforming any other state and the 3.3% national average, according to the report.

“Queensland is still in the midst of a difficult economic period which commenced with the GFC. This has continued to the present day due to ongoing problems in the construction and tourism industries as well as the damage caused by the floods and cyclones at the beginning of 2011,” the report finds.

“Further forwards, however, forecast growth rates are strong.

“Capital expenditure is the major contributor to this growth outlook, with many resource related projects providing strong prospects for the state. “

The report also cites the announcement of the 2018 Commonwealth Games in Queensland as a catalyst for growth.

Queensland has suffered a slump in room rates this year, which is not expected to recover until 2012.

“Floods and cyclones have impacted heavily, as did the recent grounding of the Qantas fleet. These one-off events came on top of a consistently high Aussie dollar, which has resulted in less international visitors and a propensity of Australians to take advantage of greater purchasing power and head overseas for their holidays,” says the report.

International tourist arrivals are forecast to increase 8.6% in 2012, then 7.8% in 2013 and 7.6% in 2014. Most international arrivals stayed level from 2001 except for Japan, which fell from more than 450,000 in 2004 to 200,000 in 2011.

The report finds most purchasers for major hotel assets in 2012 are likely to be private investors, foreign interests (especially Asian based) and operators seeking to grow the number of rooms/apartments under management.

“A litmus test for the accommodation market is likely to be the upcoming listing of the Commonwealth Property Fund Hotel portfolio with assets in Brisbane, Sydney and Melbourne,” says senior associate director of global research and consulting at CBRE Craig Godber.

“The listing will provide a good indication of both the true depth of the investment market as well as pricing.”