Colliers has released its Market Snapshot of the major hotel markets in Australia for the first half of 2019.
The review shows the majority of major markets in Australia are experiencing a decline in room rates and occupancy which is explained by the amount of new hotels being opened, rather than a decline in demand.
Colliers research suggests this trend is likely to continue with a projected 15% to 40% growth in supply across the major markets up until 2023.
New supply measured by Colliers includes: hotels under construction; those with development approval and considered likely to proceed; those with development approval but with some doubt as to whether they will be built; and those who have submitted development applications with a suitable weighting for each category.
Michael Thomson, National Director, Valuations at Colliers International emphasises that the market is still seeing positive signs, with strong occupancy and room rates still being generated in Sydney, Melbourne and Hobart in particular according to STR Data.
Tasmania’s capital exhibited the highest rate of revenue per available room (RevPAR) growth in the first half of 2019 compared with the same period in 2018, at 8.4% according to STR Data.
“Hobart continues to have demand growing at a faster rate than supply helped by the successful Winter Dark Mofo Arts Festival which has quadrupled in size since its inception in 2013 and attracts hundreds of thousands of interstate visitors every year,” said Michael Thomson, National Director, Valuations at Colliers International.
The report found that sales activity across Australia has been up on the same period for 2018, with approximately 13 significant hotel transactions on a year to date basis totalling $830 million worth of sales. This includes MACq01 the newest hotel to open in Hobart operated by the Federal Hotels Group.