GPT salivates as tourists return

A recent report by Carolyn Cummins in the Sydney Morning Herald says that there is strong evidence is emerging that tourists are heading back our way, according to hotel and leisure property owners and operators.

GPT Chief Executive Nic Lyons said the hotel and tourism portfolio had bounced back after relatively flat inbound visits to Australia in 2006.

In GPT’s results for the year to the end of March, which Mr Lyons delivered at the group’s annual investor meeting last week, its hotel/tourism revenue rose by 3.2 per cent, from $59.42 million to $61.35 million.

“Tourism income was up 6.7 per cent for the year, demonstrating the resilience of the portfolio in conditions which have been challenging for our resorts, in particular with Cyclone Larry causing the closure of both Bedarra and Dunk Islands for a period during the year,” Mr Lyons said.

GPT’s hotel and tourism portfolio makes up 8 per cent of its overall property portfolio. The main properties are the Ayers Rock Resort, the Four Points by Sheraton Hotel in Sydney CBD – the largest hotel by rooms in the country – and the Queensland island hotels.

Mr Lyons said the outlook for inbound tourism remained positive thanks to forecasts of an average annual growth of about 5.6 per cent to 2015.

“As about 50 per cent of GPT’s hotel guests are international, this should underpin portfolio performance,” he said. “Domestically, the demand outlook is more subdued, although low to moderate growth is expected.”

Mr Lyons’ comments were supported by new figures from the Australian Bureau of Statistics on international visitor arrivals data.

They showed Australia had the largest inflow of international visitors on record during March 2007.

In a recent research report, Jones Lang LaSalle Hotels says the country’s hotels are well placed to reap the rewards of these buoyant conditions.

David Gibson, chief executive, Jones Lang LaSalle Hotels, Asia Pacific, said that with the exception of December (traditionally the best month every year), international arrivals to Australia during March this year reached the highest level ever recorded – increasing by 48,000 visitors, or 10.1 per cent.

“In fact, arrivals are up 4.6 per cent over the same three month period in 2006, surpassing the previous all time high for the first quarter,” Mr Gibson said.

“Growth was exceptionally strong from Asian and European countries.”

Troy Craig, executive vice president, Jones Lang LaSalle Hotels, said the improved demand would have an obvious positive effect on increased revenues.

“The most recently released tourist accommodation data indicates that during 2006 Australia’s major hotel markets recorded the highest RevPAR [revenue per available room] results on record,” Mr Craig said.

The average rate for a five-star hotel room is about $300 per night and about $200 a night for the average three to four-star.

In addition to increasing in number, international visitors are staying in Australia longer.

Mr Gibson said latest data for the full year 2006 indicated international visitors had increased their average lengths of stays from 26.8 to 30.4 nights, an increase of 13.4 per cent.

Despite the strong RevPAR growth in all major markets, Australian hoteliers have been under pressure to lift room rates to match those of their international counterparts.

A Report by The Mole from The Sydney Morning Herald