Best of times for hotels
By Carolyn Cummins and agencies | smh.com.au | 02 February
Image: Louie Douvis
The hotel sector was one of the busiest last year, and with a 10 per cent rise in average room rates, the coming 12 months are tipped to be as hectic.
Sales turnover and improved room prices reflected stronger domestic travel and the volume of liquidity in property markets looking for a home.
Latest Australian Bureau of Statistics accommodation data, published two weeks ago, show growth came largely on the back of record occupancy levels and strong increases in room rates during the September quarter of last year.
The executive vice-president of Jones Lang LaSalle Hotels, Mark Durran, said the 10 per cent increase in revenue per available room had caught the attention of investors.
Average daily rates jumped by 7 per cent across Australia, supported by an all-time national occupancy high of 67.1 per cent - surpassing the record highs recorded during the summer of 2006, Mr Durran said.
While all major markets recorded excellent improvements in room yield, Perth and Sydney remained markets to watch as the best opportunity for income and capital growth, he said.
Hotel transactions in Australia reached a record high of $1.6 billion last year. The larger sales included the Marque Hotel, Sydney ($28 million), the Crest Hotel, Kings Cross ($33 million), the Avillion Hotel, Sydney ($115 million) and the biggest, the Park Hyatt, Sydney ($202 million).
"Rate growth in Sydney has lagged other major markets of late, however the market has made a significant turn and hotel trading performance is on the rise again," Mr Durran said. "Occupancies in a September quarter have not been higher since 1988."
Globally the market was also strong, prompting the Hilton Hotels Corporation to announce last week that it had signed a management agreement with China Merchants Property Development Company for the Conrad Beijing, due to open at the end of 2010.
The new hotel will join Conrad Hotels & Resorts, part of the Hilton Family of Hotels, as it expands its luxury portfolio in China.
The area president of Hilton Hotels Asia Pacific, Koos Klein, said the Conrad Beijing would be a strong addition to the group's growing portfolio of luxury properties in China, building on the success of the Conrad Hong Kong, which opened in 1990, and the Conrad Tokyo. The Conrad Shanghai opens in August.
First published by Smh.com.au on February 02 2008
Visit smh.com.au for the latest news updated throughout the day
