Business travel underpinning growth
International and interstate corporate travel is underpinning the accommodation rebound, aided by the resource sector according to CBRE’s latest Queensland Hotels MarketView report.
As with most sectors, Queensland’s hotels and pubs markets have been affected by the impacts of the GFC and, more recently, natural disasters.
However, CBRE’s Global Research and Consulting analyst Craig Godber said the state was forecast to return to nation-leading economic growth from 2012 to 2016, underpinned by significant infrastructure projects and the resource sector.
“The new state government has rightly identified tourism as a crucial driver of Queensland’s economy,” Mr Godber said.
“This holds the expectation that new policy initiatives will help support long-term, sustainable recovery, particularly in an era where key visitation sources are expected to continue to shift towards emerging Asian markets.”
“International visitation numbers fell by 7% to 1.897 million, hampered by the high Australian dollar and continued global economic caution. However, visitation from China increased and now accounts for the largest source of Asian visitation to the state.”
Mr Godber added that corporate based travel continues to underpin the improving performance of the state’s hotel sector with international business visitations increasing by 11% and interstate business visitor numbers rising 15%.
“Tropical north Queensland is showing signs of a turnaround driven by growth of intrastate business travel,” Mr Godber said.
CBRE Hotels’ senior director for Queensland Wayne Bunz said corporate and resource markets continued to record strong accommodation occupancy rates.
“In terms of occupancy, the corporate- focused Brisbane market improved significantly during the past year with an average of 76.7% – the highest occupancy level since 2008,” Mr Bunz said.
“Similarly the report identifies markets underpinned by resource and infrastructure projects such as Townsville, Gladstone, Mackay and Rockhampton recorded strong occupancy rates of 66.7%, 74.5%, 75.2% and 66.8% respectively.”
Mr Bunz said strengthening corporate travel and occupancy rates were spurring strong demand from investors and could push forward a number of major development projects.
“However, funding remains an impediment to new development, with significant equity levels still required.”
On the investment front, demand continues for a diverse range of assets, with opportunistic local and off shore investors, seeking to capitalise on what they feel is the bottom of the cycle.
Mr Bunz said investors believed current pricing for Queensland hotel assets provided solid opportunities for long-term growth.
“The purchaser profile for major Queensland hotel assets during 2012 will continue to be dominated by private and foreign investors (particularly Asian-based buyers),” Mr Bunz added.
“The recent sale of the Lindeman Island to White Horse (Australia) Holdings was a fantastic outcome for the tourism industry as it was the first Queensland island asset to be acquired by an entity with direct links to the Chinese market.”
The MarketView report identifies seven Queensland hotel assets with a combined value of approximately $110 million which have been transacted or are under contract over the past eight months.
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