CBRE's research team noted that compared to the previous three years overall volumes in Q1 were down, but buyers have remained active in the market. This is encouraging for an investment market that in 2017 had one of the quietest years this decade. 

Notable transactions in the first quarter were the Holiday Inn City Centre Perth selling for $65m and the BreakFreeon Clarence in Sydney selling for $30m.

Perth is garnering buyer interest as investors who are becoming increasingly shut-out of tightly held markets, such as Sydney and Melbourne, look to countercyclical buys in order to make headway in the hotel market.

Other notable transactions in Q1 were the Watermark Hotel & Spa in the Gold Coast and the Watermark Hotel in Brisbane which sold for a rumoured $100m combined.

In terms of national hotel performance, Cairns being the best performer and Perth being the worst performer is nothing new. But there are new trends in some markets in the middle of the performance spectrum where we have seen shifts in ranking.

Hotel operators in Darwin have deployed a strategy of cutting room rates substantially in order to get guests through the door, and for all intents and purposes, this plan is a success. In terms of annual growth in revenue per available room (RevPAR), Darwin is the second best performing market, a remarkable turnaround for a market that struggled recently due to a severe economic downturn.

Hobart is now firmly in decline thanks to the enthusiasm shown by developers to move into the market. Whilst Hobart continues to grow in popularity with tourists, this popularity is being far outstripped by the increases in supply which is resulting in declining RevPAR (refer the below chart).

Other key high level points from the report include:

• Annual RevPAR growth for the year ending March 2018 was 3.0% reaching $144
• ADR increased 2.0% to reach $188 for the year ending March 2018
• National occupancy jumped to 76.4% recording growth of 1.1%
• Top performers were Cairns and Darwin which registered annual RevPAR increases of 9.1% and 6.7% respectively for the year ending March 2018
• International visitor arrivals reached a record high of 8.1m, an increase of 6% on 2016, and domestic overnight trips were up 7% to 97.2m
• Spendingby international visitors in the year to December 2017 was $28.5bn, up 9% on 2016, whilst overnight spend on domestic trips increased 6% to $64.5bn
• Hotel sales volume for Q1 2018 was ~$300m

Click here to download the full Australia Hotels Marketview Q1 2018 report.

See also:

Dransfield release their Hotel Futures 2018 report

New Zealand's latest hotel market report released

Australian tourism ticking all of the boxes