The long-term outlook for Australia.
After a prolonged period of limited new supply, developers have begun to recognise Australia's solid demand fundamentals and the major markets are now seeing a range of exciting hotel product being built.
As of January 2020, there are a total of 57,316 rooms in the hotel development pipeline until 2028, from a total of 332 projects.
While recent supply growth has impacted hotel performance across most of Australia's major markets, long-term projections are for all capital cities to return to growth. Dransfield's Hotel Futures 2019 report forecasts high occupancies to underpin long-term growth of both demand (4.0 per cent p.a.) and RevPAR (3.3 per cent p.a.) annually to FY2027.
Recent STR figures show growing supply in all major markets is having a dampening impact on occupancy and rates as the number of new rooms added is growing faster than additional rooms sold. Sydney and Hobart are achieving occupancy in excess of 80 per cent for YTD July 2019, with Melbourne's falling just below this. Sydney was the top performer nationally in terms of RevPAR. For more information, visit STR's website.
In its Futures 2019 report, Dransfield Hotels & Resorts projects Australian major city RevPAR to grow at a healthy average of 3.3 per cent p.a. over the long term (to FY 2027) and 4.1 per cent after FY2019. They expect a positive supply and demand equation and sustained high occupancy levels will create rate growth opportunities, with growth expectations still well above recent history, which averaged 2.2 per cent p.a. over the last five years.
Colliers International reported a total of $1.8 billion in hotel transactions for 2018 based on 37 sales, with key highlights including:
Source: Colliers International Hotel Sales 2018