According to data from STR, openings in November
2019 pushed Australia’s hotel inventory above 300,000 open rooms.
Australia now has 5,600 hotel properties and
300,229 rooms, ranking the country 12th in the world in total room count and fourth in the Asia Pacific region.
STR defines a
traditional hotel on three exclusionary criteria: 1) generates
revenue on a nightly per-room basis, 2) has 10 or more rooms and
3) is open to the public (excludes those properties requiring
membership, affiliation or club status).
been on a progressive development path since 2016 with more than
26,000 rooms added to the marketplace,” said Matthew Burke, STR’s
Regional Manager – Pacific. “That is not counting the more than
5,000 rooms that were closed during that period and converted for
alternative commercial usage. This uptick in investment reflects
the country’s strong performance, especially in major markets. As
a whole, Australia’s occupancy has been at or near 75% for each of
the last five years, and average daily rate has consistently
ranged around 185 Australian dollars.”
The 10 largest
STR-defined markets in Australia represent 57.1% of all rooms in
the country, led by Sydney with 43,841 rooms.
While each hotel
class is well-represented in the country’s overall numbers, the
largest percentage of rooms sit in the Upscale (24.2%) and
Midscale (23.6%) segments. The Upscale class has seen the largest
influx of new supply with 10,931 rooms opened since 2015.
Among branded inventory only in the country, Accor represents
the largest market share with 32.1% of rooms, with Ascott a distant second at 7.6%.
Australia also shows 94
projects and 18,294 rooms in construction as well as 216 projects
and 36,005 rooms in the two planning phases of the pipeline.
“Australia is not likely to hit its construction peak until
next year, and we don’t expect a substantial slowing in
development anytime over the next several years,” Burke said.
“Melbourne, Hobart and Adelaide are projected to see the largest
increase based on their existing room counts, and the two
highest-tiered segments (Luxury and Upscale) will combine to
welcome 35% of the new rooms in the pipeline. As we have
seen in the data this past year, all of this new supply has put
some pressure on occupancy levels, and subsequently, hotelier
pricing confidence. Moving forward we anticipate demand growth in
almost all markets, but with sustained supply increases, we’re
still forecasting occupancy declines in the short term. Room rates
will of course be weighed by the additional competition in the
market, but that is not likely to become a long-term trend as many
markets trade at high absolute occupancy levels with the ability
to absorb new supply.”