Kangaroo Island is a regional hotspot in Australian tourism, presenting an exciting opportunity for savvy investors.
Kangaroo Island is one of the most notable destinations in South Australia. It is a place of pristine wilderness and world class food and wine experiences. It is also home to the globally renowned Southern Ocean Lodge and Flinders Chase National Park.
Visitation to Kangaroo Island has been steady with almost 200,000 visitors each year. Growth in overnight stays on the island has been strong increasing at a higher rate of 9.0% per annum. In 2017, international visitors accounted for more than one quarter of nights spent in the Kangaroo Island tourism region.
Kangaroo Island Tourism Growth 2013 to 2017
All visitation - 0.4%*
International visitation - 10.5%
Domestic visitation - -1.0%
Overnight stays - 1.9%
*This figure includes day trips, representing a lower growth figure and a larger proportion of visitors to Kangaroo Island.
Visitor arrivals into Kangaroo Island airport have been steady over the past five years and are set to increase following investments in airport infrastrucure to accomodate larger aircraft and the addition of QantasLink flights which commenced in December 2017. Direct connectivity to Australia's major capital cities will increase demand for tourism infrastructure and accommodation options on Kangaroo Island. Access to the island via ferry will also be boosted in April 2018 with a new high-speed ferry service capable of delivering 95 passengers from Penneshaw to Cape Jervis in 30 minutes.
Visitors to Kangaroo Island stay in a variety of holiday homes in the absence of significant hotels and resorts. With regards to commercial accommodation, Kangaroo Island's accommodation market has strong revenue per available room (RevPAR) growth increasing on average by 8.9 per annum over the four years to 2016. Higher room rates have been the primary driver of growth with average daily rate (ADR) increasing by 6.6% per annum, up from $218 in FY12 to $282 in FY16. The uniqueness of the destination is highlighted by the 97% ADR premimum that Kangaroo Island accommodation operators have achieved when compared to the Adelaide Tourism Region.
Kangaroo Island: HMSA Historical Trading Performance FY12 to FY16
|FY13||52.8% (1.6%)||$214 (-1.8%)||$113 (-0.3%)|
|FY14||55.8% (5.7%)||$271 (26.4%)||$151 (33.6%)|
|FY15||51.3% (-8.1%)||$183 (-32.6%)||$94 (-38.0%)|
|FY16||56.6% (10.4%)||$282 (54.5%)||$160 (70.5%)|
Against a backdrop of strong tourism visitation, international allure and the recent expansion of the airport, continued investment into Kangaroo Island's hotel and tourism market is expected, with a number of infrastructure projects currently underway and some largerscale hotel projects planned.