Black market and illegal apartments in Brisbane

A report in The Courier Mail today says that a black market of illegal residential apartments flooding the tourist accommodation industry could threaten future hotel development in Brisbane, according to an industry expert.

The practice, which has outraged some body corporates and residents in some accommodation towers, sees owners renting out residential units to short-term visitors, despite the properties not meeting building code requirements for holiday accommodation.

Tourism and Transport Forum Australia’s Infrastructure and Investments Manager Peter Staveley said the growth of the internet had made it easier for the black market to thrive, adding, “There is a lot of illegal letting in Sydney and Melbourne and a substantial number in Brisbane and, particularly, on the Gold Coast,”

He said the practice, which saw many of the legitimate accommodation providers undercut, was undermining the industry, saying “We keep hearing that Brisbane needs a new, five-star hotel but until room rates can justify construction costs, no one will be building much”.

The issue has garnered support from the Federal Government in its recommendations for the National Tourism Investment Strategy and in its response to the private sector taskforce led by groups including Accor and Macquarie Bank, it has recognised that varying quality and service levels in the accommodation could negatively impact on the industry’s reputation.

The report said, “The increasing popularity of apartment-style tourist accommodation has raised issues about a level playing field for the accommodation sector of the tourism industries,” with the strategy saying about $86 billion needed to be invested in the industry over the next 10 years.

The Australian Government accepted 34 recommendations from the strategy including suggestions aimed at improving national parks, extending the working holiday visa scheme and making tourism statistics available online.

Federal Tourism Minister Fran Bailey said a 60% boost to tourism funding had made investing in tourism even more attractive for the private sector, adding, “The strategy has also reinforced the need for the industry to concentrate on attracting more big-spending tourists, which will help industry attract investment by improving returns”.

Over the past 12 months, international tourists have spent an additional $1.4 billion and the Federal Government this week announced plans to open its first tourism office in India, most likely in Mumbai, to target that market, with Ms Bailey saying that Indian visitor numbers grew by 33% to 78,900 in the 2006 financial year and the market expected to reach 550,000 tourists by 2025, with a value of more than $2 billion.

Victoria University Head of the School of Hospitality, Tourism and Marketing Professor Brian King said the move was a great strategic initiative but there was also a need to increase air capacity to cater for any increase in travellers, adding Australia was well placed to capitalise on a connection, with the Commonwealth Games which was hosted by Melbourne last year being held in New Delhi in 2010, adding, “Tourism from India will also provide a good balance for the Chinese market which is already booming and is likely to dominate inbound tourism growth.”

Report by The Mole from The Courier Mail