Hobart shines as other cities see hotel revenue slip

Hobart was the star performer when it came to hotel revenue, recording an 8.4 per cent increase over the last financial year.

With an average room rate of $159.67, Hobart was the only major city, except for Brisbane (up 0.6 per cent to $106.4), to see an increase in revenue per available room (RevPAR), according to according to Savills’ latest Hotel Market Update.

Australia wide RevPAR decreased by 3.1 per cent. Darwin saw a significant decline of 19 per cent in demand for room nights, representing the lowest RevPAR performing market for the period at $76.25 (down 17.1 per cent).

The Gold Coast recorded a 9.8 per cent fall, followed by Cairns with a drop of 6.3 per cent. Sydney posted a 4.9 per cent decline in RevPAR while Canberra slipped 5.3 per cent.

Melbourne was down 1.9 per cent, Adelaide saw a 2.4 per cent drop and Perth slid 4.8 per cent.

“For a time, Hobart, and perhaps the whole of Tasmania, was under-appreciated, and I think we see growth that with a lot of destinations across Australia that then come into focus for both domestic and international travellers,” said Michael Simpson, managing director hotels at Savills.

“I think Xi Jinping’s visit to Tasmania [in 2014] had a huge impact on showcasing the destination to the world and also to Chinese visitors.”

Of the 10 Australian markets reported on, Sydney and Hobart are the only markets achieving occupancy in excess of 80 per cent with Melbourne’s occupancy having just dipped under 80 per cent.

International and particularly domestic visitors and visitor nights continued to grow strongly, for the 12 months ending March 2019, against a backdrop of moderate new room inventory entering most key markets.

Simpson said there had been some “unnecessary capitulation” in the way of hotel operators reducing rates in Sydney because of a perceived weakness in the market.

“Tourism generating demand as well as a couple of interest rate cuts will see business conditions improve and the currency is pretty soft at the moment, and arguably going to get weaker, so I think we’ll see more international inbound travellers,” he said.