Australia hotels defy economic gloom
SYDNEY – Australia’s hotel markets have maintained growth momentum despite the challenging economic environment.
The newly released Australian Bureau of Statistics (ABS) accommodation data shows growth came largely on the back of strong increases in Average Daily Rates (ADR) during the first quarter of 2008.
Revenue per Available Room (RevPAR), the industry benchmark for hotel trading performance, recorded solid Australia-wide growth of 5.6% during the first quarter of 2008 to reach an all time high of A$91.31.
“Whilst the rate of growth has slowed from last year, the results are an encouraging sign that Australia’s major markets are more resilient than widely thought,†said Troy Craig, executive vice president, Jones Lang LaSalle Hotels.
He added, “Queensland’s leisure markets were particularly hard hit by a very wet summer period which drove visitors to alternate domestic and international destinations.â€
ADR jumped by 7.9% to A$140.05 across Australia, despite room night demand softening by 1.1% and an average occupancy of 65.2%.
“Whilst most major markets recorded improvements in RevPAR, the cities of Darwin and Perth were industry standouts having both very strong demand and ADR growth,†said Craig.
“Sydney occupancy was 85.3% during the March quarter – which despite being slightly lower, still represents a full house position.â€
Craig added, “In this environment hotel operators are able to drive room rates harder and this is reflected in the fact that Sydney posted ADR growth of 6.4%.
“Sydney’s position as a key corporate destination may make it vulnerable to any softening in corporate travel however the market’s benign new supply outlook will insulate it to some extent.”
In Melbourne, occupancy levels recorded a slight decline but were still at a healthy 81.7% which in turn enabled operators to achieve ADR growth of 10.2%.
“Over the next two years, Melbourne will see around 1,000 new rooms come on line,†said Craig. “ Now is not the time for Melbourne to take for granted the excellent demand growth that has been achieved over the past five years.â€
Ian Jarrett
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