Accommodation market supply levels hit record high: JLL

The light at the end of the tunnel has arrived for Australia's accommodation market, with supply levels hitting a record high last year.

Research from JLL's latest Top Hotel Owners and Operators Survey showed that accommodation supply rose 1.3% to 230,064 rooms at the end of June 2013, which it described as a "positive sign" that the market is "once again poised for growth after the uncertainty of the past few years".

After declining in 2012, it said, serviced apartments emerged as the growth sector in 2013 with room supply increasing 2.6% year-on-year with the addition of 1,442 keys. That compared to growth of 1.9% (1,683 rooms) in the hotel sector and a 0.3% decline in motel rooms (-229 rooms), revealed the report, which is based on supply levels across the hotel, motel and services apartment sectors.

Of the 230,064 accommodation rooms in Australia, the top 10 owners accounted for 11.3% (26,085 rooms) of total room supply at the end of 2013 and the top ten operators 40.7% (93,691 rooms).

The survey noted that the top 10 owners recorded a 1% lift in rooms in 2013 with the addition of 267 rooms.


Source: JLL. Note: * Includes joint venture properties with Far East

Last year also brought one new entrant into the top ten - the Abu Dhabi Investment Authority (ADIA) - following its acquisition of the Tourism Asset Holdings (TAHL) portfolio. The sale saw TAHL exit the sector after more than a decade in the top spot, it said.

"The transaction represented the first major direct hotel acquisition by a Middle East group in Australia...," said JLL's Hotel & Hospitality Group chief executive for Australasia, Craig Collins.

"Offshore groups now account for 53% of rooms owned by the 30 largest accommodation owners in Australia".

Offshore investors, the survey showed, were predominantly from Asia, albeit with an increasing proportion of rooms held by Middle Eastern and global groups.

"This indicates how globalisation trends are gaining pace once again in the new era of hotel investment", JLL said.

The survey highlighted that operating groups have been very active over the past year, resulting in some significant changes to the top order.


Soure: JLL. *Note: Not provided, sourced from website

Collectively, the top ten increased their portfolio holdings 2.5%, bringing the total rooms under management to 93,961 across 963 properties.

However, JLL also said that four companies achieved double-digit growth, with the biggest gains recorded by Toga Hospitality - up 30.4%; Hilton 27.9%; Best Western 12.1 % and Oak Hotels & Resorts 10.7%. 


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