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 but recorded a slight decline in 2018 with a reduction in domestic day trippers. The Katherine region has a high average length of stay of 5.13 nights in 2018.
Katherine Tourism Growth 2012 - 2018
All visitation - 12.6%
International visitation - -1.6%
Domestic visitation - 18.9%
Overnight stays - 15.7%
The Katherine Region is located three hours from Darwin International Airport. Darwin Airport had a total of 2.03 million passenger movements in 2017/18. Domestic and regional passenger numbers recorded 1.8 million in 2017/18 and international passenger numbers reached 251,000. Passenger movements through Darwin International Airport have increased on average by 1.3% per annum over the past five years.
A range of accommodation can be found in the Katherine Region, with the most significant being holiday letting, caravan/camping and hotels. Together these property types account for 70% of nights spent in the region. According to the Australian Accommodation Monitor, there were 12 accommodation establishments in the Katherine Daly region at the end of June 2018 with 575 hotels featuring an average property size of 48 rooms. 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. Accommodation performance data is not available for Katherine in FY17 and FY18 due to an insufficient sample size.
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.