| Sydney, May 18, 2000 � International visitors
to Australia from Other Asia are set to rise according to official government
forecasts. After a 20.0% decline in 1998, the forecast 11.4% pa growth
for the next decade reflects the increasingly stable economic and political
conditions in the region. �Demand recovery is anticipated to be greatest
from China, Thailand and Indonesia, so markets that currently receive a
high level of business from this sector, such as Melbourne, are positioned
to benefit most from this growth,� said David Gibson, Managing Director
of Jones Lang LaSalle Hotels.
Economic recovery in Asia and a stronger domestic economy is expected
to result in growth of domestic business travel. �Markets catering to business
travellers such as Sydney, Melbourne and Brisbane are expected to receive
the greatest benefit of the predicted 4.6% per annum growth� continued
Mr Gibson.
Despite these signs of market recovery, Australia continues to witness
the global trend of North Asian asset divestment, according to Jones Lang
LaSalle Hotels Digest update. Already this year North Asian vendors have
constituted 86.2% of the $253 million worth of hotels sold. One such sale
included Sumitomo Realty�s disposal of the Hotel Nikko, Sydney to
General Property Trust. So far in 2000 total sales comprised 1,498 rooms
achieving an average of $168,792 per room. �Given that North Asian owners
predominately own deluxe properties, we expect a continuation of the trend
witnessed towards the end of 1999, with deluxe properties achieving a higher
ratio of sales in 2000� predicted Mr Gibson.
In 1999 sales of Australian hotels (over $5 million) totalled over $500
million, 80% of which were four and five star properties. Although the
trend in early 1999 was to invest in first class properties, investments
in deluxe properties were more prevalant towards the year end, as witnessed
in the sale of Lilianfels, Blue Mountains and The Observatory Hotel, Sydney
to European based Orient Express.
Hotel buyers are entering a solid operating climate, with Sydney continuing
to enjoy international focus. With the lead up to the 2000 Olympics, Sydney
recorded the highest market occupancy in Australia for the quarter at 73.1%.
�Despite a slight decrease in Average Daily Rate (ADR) to $150, Sydney
also recorded the highest Revenue per Available Room (RevPAR) of the quarter
of $109, an increase of 3.0% over the previous period� said Mr Gibson
(see summary table below).
Of the other major markets, Darwin continued to be the star performer
for the December quarter 1999 due to increased military and humanitarian
activity in East Timor. The city experienced a strong 30.0% growth in occupancy
and a massive 40.7% increase in Revenue per Available Room (RevPAR) to
$68. In comparison, supply increases in Melbourne resulted in a decline
in occupancy of 3.5%. This coupled with a slight reduction in ADR led to
Mebourne recording a 3.8% decline in RevPAR to $101.
Despite the influx of new supply, it is anticipated that the increase
in demand generated by the Sydney 2000 Olympic Games will sustain market
occupancy and therefore operating performance during 2000.
Major Australian
Markets' Performance
December Quarter 1999
|
Market
|
Occupancy
|
% Change*
|
ADR
|
% Change*
|
RevPAR
|
% Change*
|
| Sydney City |
73.1% |
3.4% |
$150 |
-0.3% |
$109 |
3.0% |
| Gold Coast |
63.9% |
1.8% |
$103 |
0.0% |
$66 |
1.7% |
| Brisbane City |
63.1% |
2.4% |
$101 |
-0.8% |
$64 |
1.6% |
| Cairns City |
63.0% |
1.9% |
$112 |
-1.9% |
$71 |
0.0% |
| Melbourne City |
71.7% |
-3.5% |
$141 |
-0.3% |
$101 |
-3.8% |
| Adelaide City |
71.9% |
-4.9% |
$114 |
1.2% |
$82 |
-3.8% |
| Perth City |
71.8% |
7.4% |
$104 |
-2.6% |
$75 |
4.5% |
| Cangerra |
60.1% |
2.0% |
$99 |
-1.2% |
$60 |
0.8% |
| Darwin City |
70.7% |
30.0% |
$96 |
8.3% |
$68 |
40.7% |
| Hobart |
67.6% |
0.0% |
$88 |
-7.5% |
$59 |
-7.5% |
*Change over December Quarter 1998
Source: Jones lang LaSalle Hotels; ABS
|
