Australia tourism drives most rapid hospitality growth since 2000 Olympics [Construction report]
View from the terrace at The Langham, Melbourne
With over 270 hotels in the pipeline for 2025, the hospitality market in Australia is undergoing its fastest evolution since the 2000 Sydney Olympics
The tourism market in Australia has been booming for the past three years, and as a result, so is the hospitality sector.
In fact, industry experts say they have not seen the hotel industry on the island continent evolve so much since it hosted the 2000 Summer Olympics in Sydney.
While construction rates for residential buildings have dropped, the hotel sector’s rapid growth phase shows no signs of slowing.
Tourism Accommodation Australia (TAA) reports that this trend began about three years ago, and that more than 40 new hotels have been built in the country since then.
Its figures also show that another 272 hotels are in the pipeline, slated for completion by roughly the middle of the next decade.
Hotel construction suffered a slowdown after the peak ahead of the Sydney Olympics.
Just 3,000 hotel rooms were added in both Sydney and Melbourne each between 2000 and 2016.
TAA data shows a four and five-fold increase on those numbers, respectively, by 2025.
Another 11,600 rooms are due to be added to the Sydney market and more than 15,000 more in Melbourne.
The agency’s chief executive Carol Giuseppi said the rapid expansion came down to investor confidence.
“We’ve had solid growth in demand,” Giuseppi said. “Low interest rates and the [Australian dollar] exchange rate mean there’s a lot of potential.”
The result is that for many in the hotel space across the globe, Australia remains a vital market, or at least one to keep an eye on.
Australia’s new air agreements boost tourism
Giuseppi also highlighted that Australia’s federal government was paving the way for increased tourist arrivals from overseas, having negotiated more than 100 bilateral air services agreements.
The open skies agreement with China, signed in December 2016, allows Chinese airlines greater access to Australia. “China has grown from 285,000 [airline] seats in 2005 to 1.5 million seats in 2018,” Giuseppi told ABC News.
In June last year, an air services agreement was signed with India — Australia’s fastest growing inbound tourism market according to the Australian Bureau of Statistics — to open direct services from the subcontinent.
Rise of home-style hotels
As with the rest of the world, the style of hotels in Australia has changed significantly since the year 2000.
The now popular “lifestyle” hotels are less cookie-cutter and more home-style, with unique furnishings, less bulky furniture and common areas for guests to mingle and relax.
A great example is Paramount House Hotel which opened its doors in Sydney’s Surry Hills in April last year. The 29-room hotel caters to visitors who want a community feel and to know more about where they’re staying.
“If you’re travelling and you want to stay in a hotel, you want to see a slice of that city rather than something generic. That’s why it was important for us to capture the essence of the city,” hotel co-owner Russell Beard explains.
“My partners and I are new to the hotel game, but so far it’s been really rewarding,” Beard added.
The way things are going, it’s safe to assume Beard’s fellow Australian hospitality professionals feel the same way.
Here’s a TOPHOTELCONSTRUCTION infographic detailing the current hotel pipeline in Australia.
Let’s take a look at a few other projects currently underway in Australia:
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