Wednesday, August 23, 2017

Adele sings up a storm for Brisbane hotels

Latest STR occupancy figures indicate significant growth for Australia’s hotel sector as Adele’s record breaking tour of Australia produced an events-based boom for the cities where she performed.

The largest RevPAR turnaround was recorded in Brisbane, a city that has had to contend with a fall in demand from the resources sector in recent years. Brisbane’s hotels grew their occupancy from 70.5 per cent in March 2016 to 78.6 in March 2017, an 11.5 per cent increase in occupancy resulting in a 9.4 per cent growth in RevPAR.

The success came on the back of the city staging two Adele concerts attracting 60,000 fans to the Gabba, injecting an estimated $40 million into the Brisbane economy. The city also hosted the World Science Festival and several headline sporting contests.

Events-driven demand impacted many of Australia’s cities during March, with events such as the Melbourne Grand Prix and Sydney’s Mardi Gras driving both cities to near-record performances.

Sydney’s hotels grew occupancy in March to 92.8 per cent compared to 90.1 per cent in 2016, Melbourne occupancy grew to 91.0 per cent compared to 87.2 per cent in March 2016.

Australia’s top 5 performing cities – hotels, March 2017

Rank Market RevPAR Change YTD March 2017 v 2016
1st Canberra 13.9%
2nd Sydney 9.5%
3rd Darwin 9.4%
4th Cairns 8.8%
5th Sydney 5 Star 7.8%

*RevPAR Change represents YTD March 2017 vs YTD March 2016

Tom Gibson, vice president of investment sales for JLL’s Hotels & Hospitality Group, said that most of Australia’s cities had recorded impressive growth in the first quarter of 2017, and that it was welcoming to see a turnaround in Brisbane and Melbourne.

“The power of Adele’s tour of Australia highlighted the potential of events to drive hotel occupancies across the country, and particularly in Brisbane” said Mr Gibson.

“11 out of the top 16 markets in Australia have witnessed a vast improvement in their respective RevPAR market performance, and while the rationale for this varies market by market, the common denominator to the growth has been of the cities’ success in attracting and promoting key events to drive local markets.

“Both Melbourne and Brisbane have turned negative YTD RevPAR results into positive gains off the back of key events such as the Adele and Justin Bieber concerts, the Brisbane World Science Festival, the Melbourne Grand Prix and the Melbourne International Comedy Festival.

“The results in Brisbane are particularly encouraging because for years the market was reliant on the resources sector, but the city has transformed itself from a Monday-Thursday corporate city into a dynamic tourism, events and entertainment destination with substantial growth prospects.

“The STR statistics show that the events and tourism based focus adopted by Brisbane is having long term benefits for hotels, with the city’s YTD occupancies growing from 68.3 per cent in the year to March 2016, to 71.5 per cent YTD March 2017.

“Looking to the future, with the Queens Wharf project now underway along with the second runway at Brisbane Airport, it will really cement Brisbane as a new world logistical hub with more to offer than being just a key gateway city.”

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