CBRE Research Manager Ben Martin-Henry said RevPar (revenue per available room) increased 10.4% in the 12 months to the end of Q2, following a 5.4% increase in average daily rates and a 5.4% increase in occupancy.
 
“Canberra held onto the top spot as the year’s best performer, despite strong competition from Cairns and Sydney,” Mr Martin-Henry said.
 
“This illustrates a marked turnaround in the fortunes of a market that suffered from strong supply growth in the early part of the decade. That increased supply has now been fully absorbed and the new hotel product is having a positive impact on the market’s overall performance.”
 
CBRE’s ACT Managing Director Michael Heather said the results aligned with fast growth in the broader ACT economy.
 
“The economy is being fueled by strong job and population growth as well as major infrastructure projects such as the Light Rail, which look to be having positive spin-offs for the city’s hotel operators,” Mr Heather said.
 
“These nation leading results also follow the commencement late last year of the first direct international flights to Canberra from Singapore and Wellington.”
 
At a national level, CBRE’s MarketView highlights that Cairns has been the strongest performing leisure market, despite decreases in domestic visitation which have slowed occupancy increases.
 
There has also been some positive news for Brisbane and Darwin, with both markets recording small increases in occupancy rates. However, this was not enough to halt the decline in room rates in both cities.
 
Mr Martin-Henry said the Melbourne market remained flat, with minimal increases in room rates and occupancy. This was in direct contrast to Sydney, which continued to post strong growth.
 
On the investment front, CBRE Hotels National Director Wayne Bunz said the report highlighted that just over $600 million in hotel transactions were completed in the first half of 2017 – the lowest level since 2014.
 
“The hotel markets in major hubs such as Sydney and Melbourne remain tightly held, so it is unsurprising that transaction volumes have been muted compared to previous years,” Mr Bunz said.
 
“Owners have been unwilling to park with prized assets, despite a strong appetite from investors to increase their hotel holdings, and this trend is unlikely to change in the second half of 2017.”
 
Mr Bunz said the lack of available investment stock was helping to fuel interest in development opportunities, providing an entry point for buyers and the opportunity to capitalise on the strength in Australia’s tourism market.
 
“This is particularly evident in markets such as Cairns, with applications lodged for over 400 new rooms in a city that hasn’t seen a new hotel in almost 20 years,” Mr Bunz said.

See also:

Get to know Wayne Bunz, the National Director of CBRE Hotels

$18 billion worth of infrastructure investments for Brisbane

Dean Dransfield releases Hotel Futures 2017 report