The arrival of international flights to Canberra and the resulting increase in visitor numbers has strongly contributed to the solid performance of the hotel market in the nation’s capital.
Savills research has shown Canberra continuing to perform strongly, with growth in revenue per available room (or RevPAR) buoyed by the increase in demand for rooms.
The report revealed that in the year to June, occupancy was at 77.9 per cent and RevPar had increased 3.2 per cent to $134.90.
Research by Colliers International showed that as of March 2018, Canberra’s hotel supply pipeline up to 2023 – as a percentage of existing stock – stood at less than 20 per cent. By the June quarter, this percentage was close to 30 per cent.
Colliers International city and metro sales associate director Matthew Winter said there were record tourist numbers for the year ending March 2018, with 4.94 million visitors spending 12.6 million nights in the ACT.
“Annual growth in international and domestic overnight visitors, as well as domestic day visitors is outstripping the national average,” he said. “International overnight visitors, for example, increased by 15.8 per cent, while across Australia it only went up by 7.5 per cent.
“Tourism contributes over $2 billion to the ACT economy,” he added.
“In the past two years, Canberra has become more linked to the rest of the world through the introduction of international flights to Canberra. Since May, the ACT has 14 international flights a week with Singapore and Qatar Airways now both flying daily from Canberra.”
Savills hotels managing director Michael Simpson said Canberra’s hotel market had been a low-volume transaction market for some time, with limited supply growth.
“We are pretty confident at the long-term prospects. The market just has to deal with short-term volatility around the election, but business conditions are good and the market is good, and sentiment is good,” he said.
CBRE Hotels Asia Pacific national director Rob Cross said there had been little new supply since 2014-15.
“For the near future, Canberra will remain pretty strong because it is not going to be over-supplied, the employment is strong, particularly in professional services, where there has been big growth in the last three or four years,” he said.
Colliers’ Matthew Winter said hotel development was helping to revitalise buildings that had reached their tenure as offices.
“Refurbishment is enabling these buildings a new purpose and reducing stock and vacancy levels of lower-grade commercial buildings, which is required in the ACT,” he said.
“We are also seeing older hotels undergo modernisation. Doma’s Brassey Hotel is an outstanding example. While attracting many segments of the tourist market, the Brassey’s design includes a number of touches that are particularly well embraced by corporate travellers, such as its exceptional health and fitness facilities.”