Tourism numbers continue to bounce back from the lows of 2021, supporting a renewed interest in the hotel property sector, according to an expert.
According to the Australian Bureau of Statistics (ABS), monthly visitor arrivals hit 857,950 in February, up 42.8 per cent on the same period last year, and leading to 7,636,090 arrivals in the past 12 months.
Aviation data also highlights the same phenomenon, with 3898 inbound flights per week, up from 1500 in 2023 and 1862 in 2019.
The huge increase in international flight movements into Australia has come predominantly from New Zealand and neighbouring Asian nations.
Ray White Group Head of Research, Vanessa Rader, said strong gains in international visitor numbers had a positive impact on hotel trading results, with average daily room rates and occupancy improving across most Australian cities.
“Sydney continues to be the most expensive city to holiday with the average room rate $289.80/night in March 2024, up 5 per cent over the same period last year,” she said.
“Couple this with strong occupancy of 81.9 per cent, and this has grown RevPAR (Revenue per available room) to $237.31/night, which is a 6.3 per cent annual increase,” Ms Rader said.
“Hobart features the highest occupancy rate this period at 85.2 per cent, however, it is one of the two cities which have seen room rates decline, down 3.7 per cent to $226.84/night.”
Ms Rader said the Gold Coast continued to be a mecca for not only international visitors but domestic holidayers, resulting in room rates increasing by 6.7 per cent compared to last March to $254.54/night.
“Occupancy this month sits at 67 per cent, a strong improvement on March 2023 results, but below rates achieved during the summer holiday period in December and January, which exceeded 70 per cent,’ she said.
“An increase in quality hotel stock in Perth and Melbourne has done much to grow average daily room rates, to $238.23 and $250.83 respectively.”
She said despite higher occupancy and growing room rates, the increased cost of labour and inflationary pressures on goods have impacted trading results for most establishments.
“However, the attractive growth in revenues and high occupancy has renewed confidence in investment into hotel assets by the private sector,” she said.
“Over the last 18 months, investment activity has remained subdued compared to pre-pandemic levels, with offshore buyers representing net sellers, however, they are tipped to bounce back later this year, looking to capitalise on these increased returns and stable investment yields.
“Recent activity has been centred around the east coast, with Sydney and Queensland markets the most active, while average reported yield ranges remain vast with transactions ranging from 4.3 per cent to 8.5 per cent over the last 18 months.”
