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Hotel giant names Australia its weakest market worldwide

A flood of new rooms, pre-election jitters and a weakening Chinese market have prompted Accor to label Australia its weakest market globally.

In a strong international first quarter performance for 2019, Accor saw an 8.8 percent rise in revenue to $1.57 billion and a 1.6 percent increase in group revenue per available room (revPAR) globally.

However, Australian revPAR fell 1.6 percent over the three months to March, the nation’s biggest hotel group blaming “an oversupply in major cities and the upcoming general elections” for affecting pricing and occupancy rates.

Accor also said Australia was among a number of nations impacted by fewer Chinese visitors this year – China’s economic downturn and Sino-Australian diplomatic tensions among the causes cited by industry insiders for the recent slowing of our biggest international visitor market.

[pro_ad_display_adzone id=”37778″ align=”left” padding=”20″]The Financial Review reports Accor’s under-performing Australian business “adds to a growing picture of a more general and broader weakening in local hotel returns”, particularly in capital cities around the country where rapid development is causing an oversupply of new hotel rooms.

Latest figures from data analysts STR show Sydney’s revPAR average fell 5.6 percent over the first three months of the year, Perth’s decreased by 7.2 percent, Brisbane’s dropped 2 percent and  Melbourne’s remained flat.

The picture contrasts with the government’s just-released National Visitor Survey data for the year ending December 2018, which saw domestic overnight tourism perform strongly through the end of last year.

Spend increased by 13 percent to reach $72.7 billion for 2018, while the number of overnight trips were up 9 percent to 105.6 million and visitor nights grew 7 percent to 376 million. Combined with international visitor spend of $43.9 billion, total overnight spend in 2018 reached $116.6 billion – eclipsing the government’s Tourism 2020 target of $115 billion.

While the first quarter of 2019 has put the brakes on revPAR across the major capitals, a survey by online platform Hotels.com has found regional coastal markets such as the Whitsundays, Port Douglas and Sunshine Coast are performing strongly in contrast to city ones.

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Nick Israel
Nick Israel
5 years ago

The cycle of oversupply affecting Revpar has brought about the usual concerns when there is an accommodation building boom in play and this has been on the cards for some time. No use crying over spill’t milk as this was expected. Importantly lets factor in also the impact that Airbnb is contributing to the oversupply. Airbnb will now clearly show its impact on a burgeoning oversupply of rooms. No doubt here will be good value for consumers especially those supporting Airbnb and perhaps this is an opportunity for operators to attract those Airbnb “miscreants” back to the fold………..NHI

NEIL DEVONPORT
NEIL DEVONPORT
5 years ago

Perhaps rather than accor complaining, they need to stop adding inventory to a saturated market. Its clear that 400 extra rooms added last month alone in Melbourne, by accor, now at $83 a night, its pressure our industry simply doesnt need.

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