Increased room rates attributed to rising costs
Darwin and Brisbane accommodation room rates surge past 46 percent across Jan-July period
As rising costs continue to have an across the board impact, a new report illustrates the effect they are having on the accommodation sector with room rates, and particularly in Darwin and Brisbane, soaring for the period January to July 2022.
The ‘Australian Hotels Investment Market Report’, released by professional services and investment management company Colliers using STR Global data shows while the Gold Coast, Melbourne CBD and Sydney’s room rates remain the most expensive, room rates in Darwin and Brisbane have soared 46.2 percent and 46.8 percent, respectively, for the seven month period.
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Cairns and the Gold Coast’s rates have increased by 39.3 and 32.3, respectively, and pricing in Adelaide (23.6 percent), Perth (18.7 percent), Canberra (18.5 percent) and Hobart (13.1 percent) too has increased.
Both Hobart and Melbourne CBD rates increased by more than 13 percent while room charges in Sydney, still the most expensive room rates in Australia, saw a 10.7 percent increase.
Accommodation Australia (AA) CEO, Richard Munro said it was fair to say that rising costs being faced by all businesses via supply chains, fuel costs and of course real wage increases, is responsible for pushing the price of everything up, including hotel rates.
“We are a demand/supply business in recovery mode and investors in the sector have been hard hit,” he said.
“Investors make a significant capital investment in the area a hotel or motel is built and we can’t redeploy it like an aircraft if the area suffers a downturn.
“We are recovering from one of the industry’s hardest periods of operating and we are seeing recovery and, as a consequence, as demand lifts, rates tend to increase.
“We have some of the highest minimum wage rates in the world with a complex workplace set of rules that add a significant cost to operating margin,” he said,” he said, adding that Australia’s rates are still well below Europe and other countries.
Tourism Accommodation Australia (TAA) CEO, Michael Johnson said hotels were undergoing huge across the board cost increases which were putting pressure on their bottom line.
As well as supply chain issues, he said, food and beverage increases, laundry costs, and power price hikes were all contributing factors.
Mr Johnson said pressure from wage increases too could be attributed to the situation with many employers having increased staff pay in order to keep and woo much-needed staff, many even before the government upped the minimum wage by 5.2 percent on July 1.
Mike Parker-Brown is a UK-trained and qualified journalist and an award-winning travel communicator with more than 30 years experience.
Since 2002, Mike has worked as a freelance writer and PR consultant providing his services to major organisations in Australia and internationally in the tourism, aviation, hospitality, recruitment and export marketing sectors.
