The Australian accommodation industry has seen a surge in activity as domestic travellers continue to explore their own backyard and international arrivals build.

According to Andrew Langsford, Senior Vice President of JLL Hotels & Hospitality, there is a significant amount of capital looking to be deployed across regional, metropolitan and leisure markets as investors and owner-operators see opportunity.

JLL Hotels & Hospitality Group has completed a number of recent transactions that demonstrate the demand from investors looking to capitalise on a number of very attractive sectors. The 140-room Hunts Hotel Liverpool in Sydney, offered with Vacant Possession, recently sold for around $40 million, equating to $305,000 per room and further highlighting the continued demand for metropolitan properties. 

Meanwhile, leisure locations across the east coast have also seen notable transactions, with the Sunshine Tower in Cairns selling for $10.7 million, equating to a price per room of just over $175,000 and the 60 room Scamander Beach Resort in Tasmania trading this year for $6.85 million equating to a price per room of $102,750.

Image: Scamander Beach Resort in Tasmania trading this year for $6.85 million.

In Victoria, Collendina Caravan Park in Ocean Grove was sold for $35 million, following a huge depth interest from a diverse range of investor groups, the campaign received over 300 enquiries and thirteen formal offers.

The Quest Dubbo in New South Wales, a leased hotel with 65 rooms, sold for $15.6 million, equating to $240,000 per room, while the strata-titled Sebel Mandurah in Western Australia sold to a local fund manager for $18 million, equating to $214,000 per room. 

Mr Langsford notes that the potential to rebrand and reposition assets are highly sought, providing flexibility to an incoming purchaser and creating value-add opportunities such as the ability to reposition and refurbish. He adds that transactions encumbered with Hotel Management Agreement’s (HMA’s) remain the more common, particularly as institutional capital continues to enter the space. 

The post-pandemic recovery for Hotels, Motels and Resorts has been stronger than many anticipated, with demand for assets remaining strong despite uncertainties at the beginning of 2023. Mr Langsford concludes that with several deals currently taking place across the market, the outlook for tourism assets across Australia looks positive.

Image: Hunts Hotel Liverpool in Sydney, offered with Vacant Possession, recently sold for around $40 million