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Record-breaking H1 for Australia hotels

Record-breaking H1 for Australia hotels

Australia welcomed over 4.2 million international visitors during the first half of 2017, a 7.2% increase compared with H1 2016, according to the Australia Bureau of Statistics. This increase in arrivals helped the country’s hotels reach their highest absolute levels in occupancy (+0.5% to 74.5%), ADR (+1.5% to AUD184.97) and RevPAR (+2.0% to AUD147.81) for any H1 on record.

While the market’s key performance indicators show steady growth, it is important to note that these increases occurred at the same time as a 1.7% growth in supply. 

In H1, hotel demand was mainly driven by transient business (+3.7%), while group demand was up 2.5% following a decline in H1 2016. Tourism Research Australia expects a decline in outbound travel for Australians due to the devaluation of the Australian dollar, which should help hotel demand levels continue to rise as domestic travel becomes more common. 

There are approximately 30,000 rooms set to enter the market over the next five years. Of those, 9,200 are currently in construction. Breaking down the total pipeline, 38% of rooms currently in development fall in the Luxury class while 25% are in the Upper Upscale class. 

Trends & Highlights
- Hotel performance during the 2017 State of Origin rugby matches:
          - Game 1 – Brisbane, 31 May(RevPAR +96%)
          - Game 2 – Sydney, 21 June (RevPAR +39%)
          - Game 3 – Brisbane, 12 July (RevPAR +120%)

 - The Australia/New Zealand leg of the Adele Tour earlier this year – which sold more than 600,000 tickets across 11 nights, or 54,545 tickets per night – boosted hotel occupancy and rates in each host city (Adelaide, Perth, Melbourne, Brisbane and Sydney). Adelaide recorded the highest RevPAR premium (+49%) compared with March month-to-date performance, followed by Brisbane (+36%). 

- The Grand Prix Tour brought Melbourne’s ADR up 30% on 26 March (compared with the month-to-date performance average).

 - Cyclone Debbie as a tropical low caused significant performance declines on the Gold Coast and the Sunshine Coast as well closing a number of resorts and properties in the Whitsundays. In day-to-day comparisons during the week of the impact (26 March – 1 April), Gold Coast’s RevPAR declined at an average of 22.3%, while the Sunshine Coast’s RevPAR dropped 28.4%. Performance rebounded quickly, however, and one week after the cyclone (2 – 8 April), both markets recorded only slight declines

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