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Investment surge in Australian hotel sector

By   /  November 28, 2016  /  No Comments

Australia’s hotel industry is booming, with some 120 hotel projects in the pipeline set to grow the accommodation stock by 30 per cent between 2016 and 2021.

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TAA confident that hotel room boom set to last

Photo: Primus Hotel in Sydney

Photo: Primus Hotel in Sydney

This year saw Australia pass the 100,000 room mark and it is forecast that over 4000 rooms will be added in 2017, and 5000 rooms in 2018, transforming every capital city across the country with new properties ranging from 500 plus-room internationally branded luxury properties to intimate boutique hotels designed for millennial travellers.

To overcome the lack of land in cities and high cost of construction, hotel developers have become savvy, often converting existing buildings to hotel use. For instance, the QT Hotel in Melbourne was created out of the owner’s Greater Union cinemas on Russell Street, while the art-deco Metropolitan Water and Sewerage Board building in Sydney’s Pitt Street was converted into the city’s newest 5-star hotel, the Primus.

The last time Australia saw such increases in hotel accommodation was prior to the 2000 Olympics, when there was growth of 7500 rooms between 1998 and 2000. However, that room boom was followed by a dramatic bust, with faltering international and domestic economic conditions, wars and airline collapses all contributing to the downturn.

On this occasion, Tourism Accommodation Australia (TAA) believes that a combination of circumstances will not only soak up the supply but enable Australia to attract a vast new audience of high-end tourists, business travellers, and conference and incentive groups.

Chair of TAA, Martin Ferguson, was Minister for Tourism in 2010, when he announced Australia’s Tourism 2020 goals. The addition of 40,000 new rooms over the decade was identified as a crucial ingredient in achieving the targets set for the industry.

“We recognised at the start of the decade that we needed to significantly revitalise and rejuvenate the tourism industry’s infrastructure and upgrading hotel stock was a key priority,” said Ferguson.

“With almost double digit growth in visitor arrivals – particularly from China – we are well on the way to achieving our visitor targets, and this growth will be sustainable in the long term with such high quality new accommodation being added across the country, complemented by major infrastructure projects such as airports, convention centres and urban redevelopment.

“There may be excess hotel capacity in some cities in the short-term, but this will be to the benefit of travellers through greater availability, and the increased capacity will enable cities to compete for large conferences, exhibitions and events.”


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  • Published: 9 months ago on November 28, 2016
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  • Last Modified: November 28, 2016 @ 11:54 am
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