By Ian Neubauer
Analysts are predicting the accommodation sector is in for a rough ride over the next few years as a result of dwindling consumer confidence and reduced holiday spending, with business travel propping the sector.
Most at risk are holiday resorts, backpacker accommodation and properties that rely on domestic travel.
“Business people will still need to travel to the cities,” CBRE Hotels director, George Nicholas, told The Australian Financial Review. “The resort destinations however may see a temporary impact from petrol prices.”
Jones Lang LaSalle Hotels Asia Pacific CEO, David Gibson, voiced similar sentiments: “The markets that will potentially soften a bit will be those in the domestic leisure business that primarily rely on domestic travel. People are tightening their belts at the moment.”
The prediction is already being felt by some property owners who are feeling the impact of two consecutive quarters of declining occupancies.
Occupancy rates fell two per cent during the March quarter, with one out of four investors and one out of three lenders declaring the industry outlook as negative, according to surveys undertaken by Horwath HTL and cited in the newspaper.
One company taking steps to avoid potential fallout is GPT Group, which is seeking to sell its $900 million portfolio of tourism assets, including Ayers Rock Resort, the Voyages Lodges portfolio of eco-properties and the Four Points by Sheraton Hotel in Sydney.