Visitor growth drives hotel investment in Australia

Sydney, Australia's business district.

Hospitality investors are keen to take advantage of Australia’s ever-growing tourism scene, leading to what the Daily Telegraph is calling the country’s “biggest-ever hotel boom.” 

In the next two years alone, Australia is poised to get 9,000 new rooms. The last time the country saw growth like this was before the Sydney Olympics, when it got 7,500 new rooms between 1998 and 2000. Even in 2010, Tourism Australia Managing Director John O’Sullivan told the paper, the country’s hospitality industry knew that between 6,000 and 20,000 new rooms would be needed to keep pace with visitor numbers. 

Tourism Accommodation Australia CEO Carol Giuseppi said the “unprecedented development” was necessary for the country’s tourism industry. “There may be excess hotel capacity in some cities in the short-term, but this will be to the benefit of travelers through more competitive prices and greater availability,” she said. “And it will allow cities to compete for large conferences, exhibitions and evens through the increased accommodation capacity.”

The investment, Giuseppi said, is coming from a wide range of nations—but China is one of the top sources of financing. “They’ve seen how attractive the country has been for their tourists and investors.”

As opposed to the growth from 1998 to 2000, Giuseppi said that this time, “investors can see the long-term growth potential with supply growing at a sustainable pace, matched by appropriate demand drivers.” 

What's Opening Where

Sydney alone is poised to get an additional 3,000-rooms over the next four years, with $2.3 billion worth of development approved for the city, and a further $1.9 billion proposed. Among the new additions will be the 590-room Sofitel Sydney Darling Harbour, the $700-million Ribbon Hotel and Residences development with a W hotel, and a Spicers Retreat at Potts Point.

Melbourne is slated to get a new Four Points by Sheraton in March, followed by W and Ritz Carlton hotels in 2018.

Brisbane will get new Pullman and ibis hotels near the airport, as well as the Sage Hotel in Fortitude Valley. The city’s pipeline includes brands like Holiday Inn Express, W, Adina, Westin, Peppers and Novotel.

Adelaide is awaiting a Holiday Inn Express followed by Sheraton and Sofitel hotels, and Perth will add Aloft Hotel, Intercontinental and Doubletree by Hilton next year with a Ritz Carlton, QT Hotel and Westin to come.