Property services firm, Colliers International has predicted Sydney’s hotel market will recover before most other capital cities of Australia, following the latest Australian Bureau of Statistics (ABS) data.
Colliers International’s national director of hotels and leisure, Michael Thomson, said Sydney’s expected recovery is due to limited new supply in the pipeline and the city having been particularly exposed to the downturn in the financial markets.
“As Sydney is the international gateway to Australia, once the markets recover, the city is well placed to bounce back quickly,” said Thomson.
Sydney hotels will bounce back predicts Colliers International’s Michael Thomson
ABS results show that Sydney’s hotel market held up reasonably well in 2008 largely due to a strong first half with rate growth of 3 percent to $184.69 and occupancy decreasing by only 1.1 percent to still hold at just in excess of 80 percent.
Overall, Australia’s accommodation sector continued to perform at a steady pace for the 12 month period to December 2008, despite easing hotel occupancy levels.
The ABS results found hotels in most of the state capitals have continued to see average room rate growth. Two of the stronger markets were Perth and Canberra.
Despite the decline in occupancy, Australia’s hotel sector was coming off a high base with limited new supply coming into the major markets with a couple of exceptions, said Thomson, adding that it will be challenging year and most hoteliers are chasing volume business to sustain occupancy levels.
In 2008 Darwin saw the opening of a number of new hotels, increasing room supply in the market by 7.8 percent in the 12 month period to December 2008. These would be partly absorbed by the new Darwin Convention Centre which opened in June 2008.
In the same period, the Perth hotel market saw a notable supply increase of 5.9 percent, which was absorbed by an increase in room nights sold. In Sydney and Melbourne, supply growth was only marginal, increasing by 1.0 percent and 0.6 percent respectively.
“Hotel supply across Australian cities remains limited which is positive for existing hotels trading in a difficult market,” said Thomson.