Australia poised for steady growth: Deloitte

A new report by Deloitte predicts steady RevPAR, occupancy and ADR increases over the next two years in Australia, fueled by increased arrivals from Asia, particularly China and India.

The “Tourism and Hotel Market Outlook for Q1 2012” report by Deloitte Access Economics, which covered markets in Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Darwin, Gold Coast and Tropical North Queensland, found that:

  • room occupancy rates, driven heavily by the forecast growth in international visitors, are projected to increase solidly over the forecast period, increasing from 65% in 2012 to 68% by the end of 2014.
  • room rates are expected to continue to perform strongly, reaching an average A$150 (US$161.50) by year’s end and A$160 (US$171.90) by the end of 2014 – an average annual growth rate of 3.8%.
  • projected average yield per room for 2012 is forecast to reach A$100 (US$107.44) by the end of the year (a 5.5% increase on 2011), and A$110 (US$118.18) by the end of 2014.

“Business travel demand is up, and the gains on that front have been sufficient to encourage operators to edge up room rates. The expected improvement in international visitor numbers, together with continued growth in the domestic business sector, should see occupancy rates reach their highest level for several decades,” said Lachlan Smirl, director at Deloitte Access Economics. “Sydney and Perth, in particular, are bordering on ‘capacity-constrained’ territory where several nights a week the ‘full house’ signs are up. While this is good news for the hotel sector, it is less so for other parts of the tourism industry. With the pipeline of hotel investment looking modest, the challenge of ensuring a sustainable level of capacity while not unduly undermining returns to existing investors will be increasingly important for the industry over coming years.”

A PDF of the full report can be downloaded here.