Katherine is a regional hotspot in Australian tourism, presenting an exciting opportunity for savvy investors.
The outback meets the tropics in Katherine, an area three hours’ drive south of Darwin. The Katherine Region, at 400,000 square kilometres is roughly the size of France and double the size of the state of Victoria.
The region is part of the Top End of Central Australia, meaning it experiences both the monsoons of the Top End along with the dry climate of the Red Centre.
Tourism to the Katherine Region peaked in 2017 at 600,000 visitors after having recorded strong growth over the past year. A broad range of accommodation can be found in Katherine with the most significant being holiday letting, caravan and camping. Together these property types account for more than 50% of nights spent in the region.
Katherine Tourism Growth 2013 - 2017
All visitation - 12%*
International visitation - 8.2%
Domestic visitation 3.6
Overnight stays - 3.9
*This figure includes day trips, representing a lower growth figure and a larger proportion of visitors to Katherine.
The Katherine Region is located three hours from Darwin International Airport has experienced consistent passenger growth over the past ten years. Domestic and regional passenger numbers recorded 1.8 million in 2016/17 and international passenger numbers reached 284,000. Airnorth services Katherine with three flights per week from Darwin, and is due to commence daily services on a seasonal basis from May 2018.
The hotel segment is quite small but has recorded strong growth in line with improving visitation. Hotels and serviced apartments have experienced strong revenue per available room (RevPAR) growth over the past five years increasing on average by 6.3% per annum. Higher room rates have been the primary driver of growth with average daily rates (ADR) increasing 6.5% per annum, up from $99.89 in FY12 to $128.67 in FY16.
Katherine Tourism Region: HMSA Historical Trading Performance FY12 to FY16
|FY13||51.79% (-8.6%)||104.43 (0.4%)||54.1 (-4.4%)|
|FY14||53.36% (3.0%)||114.23 (1.5%)||61.0 (12.7%)|
|FY15||56.38% (5.7%)||114.66 (2.0%)||64.6 (6.1%)|
|FY16||56.09% (-0.5%)||128.67 (4.5%)||72.2% (11.6%)|
Investment activity in the region remains limited owing to the small size of accomodation market and with a greater proportion of nights directed to camping and holiday letting stays. The Northern Territory Government has recently released a $103 million tourism stimulus package to attract more visitors which also includes an allocation towards new tourism infrastructure and attractions. This may see private investment increase when coupled with improvements in visitation and as travellers seek out singular iconic travel experiences.