Hotels hotels hotels, why so many new hotels?
In the era of Airbnb - and its relatively light regulation - you could be forgiven for thinking there mightn't be a need for so many new hotels however investors appear to be unperturbed by the room-and-whole-property-sharing platform and others like it.
Just this week we've had three hotel reports. It was announced yesterday that the Westin brand will head into Adelaide's GPO development, Little Collins Street in Melbourne could see another hotel, and there are shifting intentions in Sydney as well.
Hotels are a major piece of a city's tourism infrastructure however they are not the sole accommodation provider - sharing platforms like Airbnb and Stayz, family accommodation and holiday houses all play a part in housing, temporarily, visitors to a city or region.
Sharing platforms increase the size and add competition to the accommodation market however they're likely to face tougher regulation over time. This article in The Age is not all that uncommon - short-stay accommodation that disturbs the peace will only go as far as the local community will tolerate it.
The New South Wales Government recently introduced new regulations which among other things limit the number of nights (180 per year) a property can be let out on a short-term rental basis in metropolitan Sydney. Regional areas will have no automatic cap but local councils will be able to impose their own limits, the ABC reported last month.
The Victorian Government set up a panel to look at specific short-stay accommodation issues which resulted in a report, and according to the panel's website, the government is consulting with stakeholders.
The bigger picture
In short, Australia - its cities and regions - are going through a tourism boom. Both domestic and international tourism is growing 2-3x the population growth rate in many cities and the 'traditional' accommodation providers are simply responding to it.
Data from the Tourism Research Australia shows total number of domestic visitors to the major 5 capitals has growth between 20% and 42% over the past ten years.
| City | Number of visitors, year ending December 2017 | Number of visitors, year ending December 2007 | Growth |
|---|---|---|---|
| Sydney | 9,924,000 | 7,392,000 | 34% |
| Melbourne | 9,251,000 | 6,509,000 | 42% |
| Brisbane | 6,485,000 | 4,931,000 | 31% |
| Perth | 3,943,000 | 3,061,000 | 28% |
| Adelaide | 2,791,000 | 2,324,000 | 20% |
International visitor numbers from Tourism Australia also show high growth with the total international arrivals into Australia at the year ending December 2017 sitting at 8.8 million representing a 6.6% year-on-year change.
Just as increasing numbers of passengers flying through airports is forcing policymakers to re-think ground transport - Perth has a rail link under construction, it looks like Melbourne will finally get one with the PM chipping in $5 billion - developers also have been busy responding to the continuing growth in tourism numbers right across the country.
To see a list of all hotels on the Urban.com.au database, click here.
