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Massive new investment in hotel development highlights sustained strength of Australian tourism

Vicky Karantzavelou - 16 March 2017, 00:10

TAA's hotel 'pipeline' report follows the recent release of the latest International Visitor Survey (IVS) results which revealed 11% growth in visitor arrivals for the 2016 year, taking the total number to 7,624,665.

The Australian hotel industry is responding to continued record international visitor growth with a record level of hotel investment – over $8 billion – that is set to transform Australia's accommodation and tourism sectors.

Figures released recently by Tourism Accommodation Australia (TAA) identify 228 hotel projects (34,702 rooms) under construction, approved for development or in advanced planning stages in the six State capitals and Darwin.

TAA's hotel 'pipeline' report follows the recent release of the latest International Visitor Survey (IVS) results which revealed 11% growth in visitor arrivals for the 2016 year, taking the total number to 7,624,665. Korea and Japan led the increases with 24% annual growth, followed by China (17%) and USA (16%). Total international visitor spend grew 7% to reach $39.1 billion, injecting an additional $2.5 billion into the Australian economy in 2016.

Australia's hotel development 'pipeline' (2017 – 2022)

Rooms completed 2016-17

Rooms under Construction

Rooms Approved

Rooms Planned

Pipeline Projects - Hotels

Total Pipeline (Rooms under Construction, Approved, Planning)

Sydney

2407

2495

3126

3184

46

8805

Melbourne

388

2227

5150

3878

85

11255

Darwin

273

91

200

1137

11

1428

Perth

891

1934

1008

4225

50

7167

Hobart

0

300

311

796

8

1407

Adelaide

0

245

856

880

10

1981

Brisbane

85

1051

974

634

18

2659

Total

4044

8343

11625

14734

228

34702

Table: Reported hotel development projects in Australia 2017 – 2022 (Source: Tourism Accommodation Australia)

Recent hotels announced for development include:

  • Marriott International's Luxury Collection Hobart: a 128 room hotel at Parliament Square, which is part of a $150 million urban regeneration project funded by the Melbourne-based Trawalla Group and Sydney-based private developer, Citta Property Group. It is due for completion in 2018;
  • IHG's Holiday Inn Sydney Central: the 305 room hotel will be developed by China's Linzhu group in the Central Park precinct at the southern end of the CBD. The hotel is scheduled to open in 2020;

These announcements follow a strong flow of openings in 2016, capped off by the opening of Australia's most expensive hotel development, Crown Towers Perth, in December. The luxurious hotel was built at a cost of $650 million and features 500 premium guest rooms and villas along with Perth's most comprehensive range of high-quality entertainment, leisure and dining facilities.


Holiday Inn Sydney Central

In addition, a massive rejuvenation of Australia's existing hotel stock is underway, highlighted by the recent announcement that Mulpha would invest $200 million in a complete upgrade of the flagship InterContinental Hotel Sydney.

CEO of Tourism Accommodation Australia, Carol Giuseppi, said record levels of investment – both local and overseas – would revolutionise Australia's hotel industry over the next five years.

"This is the most extensive and all-encompassing hotel rejuvenation phase in Australia's tourism history," said Ms Giuseppi.

"It is both responding to the massive growth in tourism demand and anticipating long-term growth in the visitor economy.

"The investment boom is covering all aspects of the industry – from international chains to boutique properties, city centre to suburban, business to resort. Cities such as Perth, Brisbane and Adelaide have been transformed by a substantial number of new hotel openings in the past few years, and Sydney is set to follow suit with $2.3 billion worth of hotel projects already approved and a further $1.9 billion of projects proposed and in advanced stages of planning.

"Investor confidence is being supported by Federal and State governments' commitment to major tourism and urban infrastructure projects including new convention centres, airport facilities and tourism precincts.


Crown-Towers Perth

"The investment pipeline will fuel Australia's economy and employment for many years to come. Already the industry supports over 184,000 full time equivalent jobs directly and through flow-on impacts, and the 200 hotels in the pipeline have the capacity to deliver a further 30,000 full-time equivalent jobs.

"However, future investment could be jeopardised by the growth of unregulated accommodation which has no barriers to entry, little transparency and few controls. It is time for Australian authorities to follow the lead of overseas cities and crack down on the proliferation of commercial short-term operators."

 

Photo caption: Marriott Luxury Collection Hobart


 

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