Hotel pipeline shrinks as building sector problems bite


Australia’s hotel pipeline has been slashed by almost 1000 hotel rooms over the next year as challenges in the building industry spill through to the accommodation sector.

Colliers has also downgraded their forecasts for the next two years with a further 1700 rooms wiped off early predictions.

“New hotel supply this year only represents an increase of 3.15 per cent of stock, with the cost of construction, supply chain and financing issues in uncertain times incurring a moderation in new room openings from 6000 to 5049 this year,” Karen Wales, head of hotels of transaction services at Colliers, told the Australian Financial Review.

“At this stage, the supply for new room openings for 2024 and 2025 has also moderated for the same reasons.”

There are still plenty of big ticket openings this year including the world’s largest W Hotel in Sydney at the end of the year and the Queen’s Wharf development in Brisbane, which has been pushed back until early 2024.

“With the last significant surge in Australian hotel supply being dominated by serviced apartments around the time of the Sydney Olympics, new developments will see Australia play catch-up with the rest of the world, with boutique, lifestyle and new standards of luxury coming to the fore,” Wales said.