CBRE has reported that the top performers in the Australia hotel market were Cairns and Canberra who registered annual RevPAR increases of 9.5% and 8.2% for the year ending December 2017.

"At the other end of the spectrum, unsurprisingly, Perth had another tough year due to a combination of a sluggish economy and large increases in supply. Perhaps of more surprise is that the other members of last years’ top three can this year be found in the bottom three," the report states.

Hobart is also struggling with an increasing supply pipeline which is hampering operators’ ability to increase room rates despite strong increases in visitation, whilst conversely, the Gold Coast was able to increase room rates but struggled with declines in occupancy.

In the national transaction space, "the last quarter of the year saw over $400 million worth of hotels transact, but this was not enough to stop 2017 recording the lowest sales volumes since 2011."

The ibis and Mercure Brisbane were both sold to German asset manager Commerz Real for a combined total of $77 million, and Ovolo Group purchased the Emporium Brisbane providing further evidence that Brisbane’s recovery is well underway.

Recent improvements in trading conditions and a lack of purchasable stock in Sydney and Melbourne should result in further investment activity in Brisbane in 2018.

Other notable transactions in Q4 were the Adina Melbourne selling for upwards of $54 million and the Royce Hotel also in Melbourne selling for a reported $48 million.

Adelaide and Sydney also recorded significant deals with the ibis Styles Adelaide selling for $36 million, and the Mercure Sydney International Airport going for a reported $76 million.

The above chart shows the number of new rooms expected to come into each of the major markets in the medium term and the resultant percentage increase. 

"Markets such as Hobart, Melbourne, Perth and Brisbane have large supply pipelines which are having a detrimental effect on the market as they struggle to cope with the large influx of rooms."

"More stable markets, such as Canberra, Cairns and Adelaide are enjoying a period of increased performance due to the minimal increases in supply."

Click here to download the full CBRE Research report.

Click here to view Wayne Bunz' profile on The Hotel Conversation, who recently transacted the Emporium Hotel Brisbane for $40 million and also Brisbane's ibis and Mercure Hotels for $77 million.

Click here to view CBRE's Research Manager, Ben Martin-Henry's profile on The Hotel Conversation.

See also:

High speed rail line proposed for Brisbane to Sunshine Coast

Chinese tourism has reached a new $10 billion record in Australia

Six-star Riverbank hotel proposed for Adelaide