Why Australia's hotel growth may be out of control

(Sydney, Australia's business district.)

With major investors from across Asia building and buying, Australia's hotel scene is booming, and shows few signs of slowing down. But are hotels Down Under growing too fast?

The Numbers 

According to Tourism Accommodation Australia, the country has 228 hotels with 34,702 rooms currently under construction, approved for development or in advanced planning stages across the country’s capital cities.

Upcoming hotels include Marriott International’s Luxury Collection Hobart, due for completion in 2018, and IHG’s Holiday Inn Sydney Central, scheduled to open in 2020. 

The InterContinental Hotel Sydney, meanwhile, is slated for a $200 million renovation.

“Cities such as Perth, Brisbane and Adelaide have been transformed by a substantial number of new hotel openings in the past few years, and Sydney is set to follow suit with $2.3 billion worth of hotel projects already approved and a further $1.9 billion of projects proposed and in advanced stages of planning,” TAA CEO Carol Giuseppi said. “Investor confidence is being supported by Federal and State governments’ commitment to major tourism and urban infrastructure projects including new convention centers, airport facilities and tourism precincts.”

The Flip Side

However, Giuseppi noted, future investment could be put in jeopardy by the growth of unregulated accommodation with no barriers to entry, little transparency and few controls. “It is time for Australian authorities to follow the lead of overseas cities and crack down on the proliferation of commercial short-term operators,” she said.