Hotel owners have posted the highest Average Daily Rates, on record for a June quarter -

The newly released Australian Bureau of Statistics (ABS) accommodation data show that national occupancy and ADR levels reached a new pinnacle for a June quarter.

"Simultaneously, Australia enjoyed the highest level of international visitor arrivals during June 2007 – a welcome boost to occupancy levels and room rates," said Mr Troy Craig, Executive Vice President, Jones Lang LaSalle Hotels.

He added, "Apart from Melbourne, all major markets recorded the highest ADR ever for a June quarter with positive signs of continued improvement."

"Nationwide, RevPAR (Revenue Per Available Room) growth of 7.5% was driven largely by the strong increases in ADR of 5.8% and slight growth in occupancy levels to 61.9%," said Ms Karen Wales, Vice President Research, Jones Lang LaSalle Hotels.

Of the major markets, five were outstanding with RevPAR growth in excess of 10%: Perth (22.3%), Adelaide (20.8%), Darwin (15.7%), Canberra (12.3%) and Sydney (10.9%). 

"Sydney recorded the highest demand growth of all markets pushing occupancies to 75.4% - the highest level in a June quarter for almost 20 years," said Mr Craig. 

He added, "Rate growth in Sydney continues to lag other markets in Australia but with such positive demand fundamentals we expect to see stronger growth in the short to medium term." 

As the key gateway city, Sydney is the major beneficiary of inbound tourism to Australia and arrivals are up 3.6% for the seven month period to July 2007.

Demand growth was also strong in Adelaide (6.3%) and Perth (4.6%).  Perth remains Australia's top performing hotel market with exceptional RevPAR growth of 22.3%. 

"This is an outstanding quarterly result given that it's the highest RevPAR level ever recorded in any quarter; surpassing levels seen during the 2006/07 peak summer trading period," said Ms Wales. 

Whereas in Adelaide, the level of mineral exploration and new mining projects in South Australia recently skyrocketed, leading to speculation that Adelaide will be the next boom city.

Brisbane was one of only two markets with significant new hotel development.  "Room supply increases of 4.0% were fully absorbed with occupancy levels remaining the highest of all major markets at 80.2%," said Mr Craig. 

Ms Wales added, "Indicative of the current strength of the Brisbane market, the city continues to record exceptional room rate growth, increasing 9.7% during the quarter to the second highest levels in the country - surpassing Melbourne for the first time."

In Cairns, the market was unable to absorb a higher 5.2% increase in supply.  "Softening demand growth has led to declining occupancy levels and in turn, the market was the only one to see a drop in RevPAR. 

 "The Cairns accommodation market is heavily dependent on air services and we expect that Cairns should benefit further from the expansion of the low cost travel network across Asia," said Ms Wales.  The strengthening Australian dollar has also most likely impacted on negative travel sentiment to Australia from Japan.

Melbourne's trading performance results were slightly skewed - coming off a high base due to the benefits associated with the 2006 Commonwealth Games. 

"Despite future additions and alterations to room supply due to the development of the new Convention Centre, Melbourne remains one of the best performing hotel markets in Australia with expectations for future growth in ADR being positive," said Ms Wales.

"Gold Coast continues to benefit from reductions in room supply however this trend is expected to be short lived due to several serviced apartment projects that are currently under construction coming on line in 2008," said Mr Craig.

Those top performing markets in the quarter also show the strongest growth for the six months to June 2007.  High occupancy levels have been recorded in the major gateway cities of Perth (80.2%), Sydney (80.6%), Brisbane (79.7%) and Melbourne (79.8%).  

 "Having increased by 8.2% Sydney has recorded the strongest demand growth, now on par with those levels experienced in Melbourne over the last few years," said Ms Wales.