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Revenue rises for Australia's hotels.
Thursday, 27th October 2005
Source : Jones Lang LaSalle Hotels
For the second quarter in a row every major hotel market recorded room yield growth, the newly released Australian Bureau of Statistics (ABS) tourist accommodation performance data for the June quarter 2005 indicates that all major markets recorded growth in revenue per available room (RevPAR). 

This continued growth has been attributed to hoteliers capitalising on strong occupancy levels in most markets along with an increase in international arrivals to Australia.

Across Australia during the June quarter 2005, RevPAR for tourist accommodation increased by a healthy 6.4% to reach $67.  "For the year ended June 2005, international arrivals to Australia increased by 6.3% to reach 5.0 million visitors – while international visitor nights to hotels, motels, resorts and serviced apartments increased by 11.2%," said Mr Troy Craig, Executive Vice President, Jones Lang LaSalle Hotels.  He added, "The great news is that on the back of current growth, the Tourism Forecasting Committee (TFC) have revised forecasts and now expect inbound growth of 5.1% over the next decade."

Assisted by a strong inbound business and convention sector, Brisbane recorded the second highest increase in RevPAR out of Australia's ten major cities.  "With demand growth of 8.9% and 80% plus occupancy levels enabling hoteliers to push rates 11.6% higher, RevPAR surged forward by 16.2% to reach $102, up from $88 last June," said Mr Mike Tidbold, Executive Vice President, Jones Lang LaSalle Hotels.  Sydney aside, Brisbane was Australia's only city to record a room yield of over $100 in the June quarter 2005.

Around other parts of Queensland, a moderation in demand growth during the June quarter 2005 made trading conditions a little more constrained.  "In Tropical North Queensland and the Gold Coast, there has been a softening in Japanese visitor arrivals," said Mr Tidbold.  Strong rate growth in both markets was the main driver for increases in RevPAR.  "Occupancy levels in Cairns were 4.0% lower than the previous year, however with growth in ADR of 5.3%, RevPAR managed to edge upwards to $71 for the June quarter 2005," Mr Tidbold added. 

On the Gold Coast, whilst ADR levels were driven 7.1% higher, occupancy levels softened slightly.  "With a growing RevPAR level, accommodation providers on the Gold Coast may start to find the new additions to supply very competitive," said Mr Tidbold.  "Unless the new hotel and serviced apartment operations can create their own demand, we expect RevPAR growth to ease over the short to medium term," Mr Tidbold noted.

With occupancy growing by 6.4%, coupled with an increase in ADR of 5.0%, Melbourne recorded an excellent RevPAR result during the June quarter 2005.  "After a period of oversupply, Melbourne has capitalised on its reputation as Australia's leading events destination to record RevPAR growth of 11.8%," said Mr Craig.  He added, "Melbourne is currently reaping the rewards of its impressive calendar of events and will continue to strengthen in the lead up to the 2006 Commonwealth Games."  For the year ended June 2005, international visitor nights in Melbourne increased by 7.7% to reach over 21 million visitor nights.

Although Sydney occupancies dropped slightly, average daily rate (ADR) now stands at $155.  "This represents a 4.9% increase compared to the June quarter last year and the highest June quarterly ADR result ever posted," said Mr Craig.  He added, "Sydney's consistently healthy occupancy levels and limited new supply assisted in driving RevPAR higher to $111 (+2.3%)."  This also represents the best ever June quarter result with the four star sector being the top performer with a 4.1% increase in RevPAR.

With growth of 17.6%, the strongest RevPAR result was reserved for the Darwin market, with Perth also recording strong growth of 14.7% during the June quarter 2005.  "Darwin may be the next hot spot of the hotel sector with the city also experiencing a period of strong development activity," said Mr Tidbold.  The $1 billion Darwin City Waterfront and Convention Centre Project is also likely to assist further growth in the top end.

"Looking ahead, Jones Lang LaSalle Hotels is confident that RevPAR growth will continue in most key markets due to limited new supply and solid demand growth," said Mr Craig.  He added, "Although the TFC has revised their domestic tourism forecasts down, we expect the positive inbound visitation numbers to be a major benefit to Australia's hotel industry." 

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