MARKET REVIEW
MARKET REVIEW
PERTH TOURISM MARKET
In the 2014/15 financial year, there were 782,575
international visitors to Perth, equating to approximately
19% of total international visitors to the Experience Perth
region, who spent 23,011,011 visitor nights in the region.
Major source markets include United Kingdom, China and
New Zealand. The average length of stay by international
visitors remains in excess of 29 nights.
In the same period, Perth attracted 40% of the
domestic visitors to Western Australia, equating to
3,281,361 annual visits and 11,734,273 visitor nights.
The length of stay is lower than other states due to the
fly-in fly-out nature of the mining sector associated with
Western Australia.
HOTEL MARKET PERFORMANCE
The Perth market has, for the past decade, enjoyed very
strong business orientated demand which has seen most
of the city running at 80% plus occupancy levels mid-week;
however weekend demand which is typically leisure based
produces substantially reduced occupancy. The limited
new room supply and consistently strong demand levels
have produced both high occupancy levels and average
room rates.
The results from the Australian Bureau of Statistics survey
data reflects a slowing rate of growth, largely due to the
stalling of the market in the second quarter, with the
average annual rate of RevPAR growth over the past five
years at 1.9%. Discussions with market participants suggests
that room demand has grown slightly within Perth, however
the ability for hotels to benefit from late call high yielding
opportunities has diminished resulting in decreased ADR
levels by some 1.8% per annum on a rolling twelve-month
measurement basis.
EXISTING AND FUTURE SUPPLY
The Perth hotel market has enjoyed a relatively stable
supply for a number of years. Within the CBD there are
limited projects currently under construction but a large
number is mooted to be undertaken over the coming
five-year window. Recently completed developments in the
Perth CBD (east and west core) include Como The Treasury
(48 rooms) and The Alex Hotel (74 rooms).
There are a number of developments still known to be
under consideration or in progress. If all these projects were
to come to fruition it would represent a 60% increase on
current room stock. Inevitably not all these mooted projects
will progress to completion. In terms of our market outlook
for Perth we anticipate an increase in supply of some 1,928
rooms over the coming five years.
Additions to room supply will start occurring over the
next two years. Over this short term period we anticipate
growth in room demand simply on the basis that there are
more rooms available thus diminishing the level of would-
be travellers who in the past have been unable to travel
due to lack of available rooms at a reasonable price level.
In our view the additional supply of hotels will see a
reversion of room tariffs which are more appropriate for their
quality than has been present in this market over the past
several years.
HOTEL MARKET OUTLOOK
While strong demand levels have produced high
occupancies, the rate of growth has tempered over the past
year and the outlook over coming months is less optimistic
than previously expected. Notwithstanding this caution,
occupancies are likely to remain high in a stable supply
situation with room rates expected to moderate further.
Given the recent strong market performance experienced
and the expectation that this will continue, a number of
hotel and serviced apartment projects are being proposed.
It will be some time before these projects come to fruition
which should see occupancies remain in the 75-80% range
in the foreseeable future and room rate to continue to
moderate.
PERTH, AUSTRALIA
HOTEL PROPERTY SECTOR
31
Annual Report 2015
