Adelaide hotel sector continues to grow and change

Colliers International observes impact of three new hotels in Adelaide market, with more in pipeline

Three significant hotels opened in Adelaide in 2015, influencing the city’s recent hotel performance, according to Colliers International data.

Ibis Adelaide introduced 311 rooms to the market, Mayfair Hotel introduced 170 rooms and Quest King William South introduced 67 apartments.

“These hotels entering the market evidently impacted overall hotel market performance, with occupancy levels dropping in 2015 before recovering again in 2016,” Colliers International’s head of Hotels, Gus Moors, said.

In 2016, hotel occupancy rates increased to 77.1 per cent, up from the 2015’s 75.4 per cent, and Average Room Rates (ARR) increased by 0.5 per cent to $149.80 per night.

“This recovery is expected to continue this year and into 2018, before the market sees more new entrances which it will need to absorb,” Mr Moors said.

An Atura hotel at Adelaide Airport is due to open in late 2018; a Sofitel hotel proposed for Currie Street is anticipated to open in 2019; an Aloft hotel with 200 rooms is anticipated to open in 2019; and a proposed Sheraton hotel is also anticipated to open in 2019.

Data collated by Tourism Research Australia projects that total visitation to South Australia, including domestic and international visitors, will continue to grow during the forecast period to 2024-2025.

Leisure visitors to Adelaide are expected to grow by 3.7 per cent in 2016-2017 and about 3.0 per cent in the coming years to 2024-2025. Business visitors are also predicted to increase.

“We would anticipate that a significant proportion of these visitors to the state would stay in hotels,” Mr Moors said. “However, some may stay in other forms of accommodation, including hostels, backpackers and caravan parks.”

The total visitation nights are anticipated to grow by up to 4.5 per cent in the next two years and just more than 3.5 per cent in the longer term.

Colliers International Adelaide South Australia Hotels market overview Mayfair Ibis Sofitel Quest CBD city accommodation

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