The latest statistics show the hotel industry in Australia is in good health, with Revenue per available room (RevPAR) increasing on last year. This measurement compares a hotel’s average daily room rate with its occupancy rate, providing an accurate picture of performance, including the effectiveness of management strategy. The good news is that the most recent Deloitte Access Economic data shows the national RevPAR increased by 2.4% in 2017, with a projected growth of 3.1% by 2019. But what can we learn about the current industry from digging deeper into the data?
The number of international and interstate visitors to Australia is steadily rising and impacting upon the hotel industry. The RevPAR of the Gold Coast, Darwin and Adelaide increased the most in 2017 by 15.4%, 6.9% and 6.5% respectively. Sydney is ranked as the best performing city with a RevPAR of $251, maintaining a $50 margin ahead of Melbourne’s market. As the most popular tourist destination in the country, it’s unsurprising that Sydney is seeing the most spend with some incredible hotels, both luxury and affordable, on offer. We recently worked on a number of exciting projects such as the Ovolo 1888 upgrade and the iconic Radisson Blu in the city.
A notable growth in international visitors to our shores has been a fundamental factor in the thriving Australian tourism and accommodation sector. Nine million overseas visitors made their way Down Under between March 2017/18 – an increase of 7.7% on the previous year. Data from Tourism Research Australia demonstrates that Chinese visitors are now the largest source of overseas visitors, with over 1.4 million gracing our shores, a title formerly held by New Zealanders.
China’s developing economy and growing middle class means increasing numbers can afford to travel abroad. Recent record high visitor numbers in February coincided with Chinese Lunar New Year celebrations and the nationwide public holiday. The country is well and truly taking its place on the world stage as a leader in investment and purchasing of luxury fashion and household goods, so it’s no surprise that Australia’s luxury accommodation market is also in demand. Australian retail sales rose by 0.6% in February, with ABS suggesting that Chinese tourists are likely to have contributed to this sudden sharp spending increase.
According to +STR we can expect continued growth in the hotel industry, with a total of 211 accommodation projects being progressed by 2024, totalling to 42,026 new rooms. With the Gallagher Jeffs team having managed more than 48 major hotel projects and been involved with incredible tourist attractions such as MONA from the beginning, we’re excited to see what the next year brings for tourism and accommodation in Australia.
Information provided by Deloitte Access Economics, The Australian Bureau of Statistics and Tourism Research Australia.