- 90% of hotel-industry participants look to maintain or increase their stake in the sector
- This is despite many expecting a measured recovery in the hotel sector performance
- Queensland and New South Wales are considered the most-attractive hotel markets
Hotel investors are demonstrating confidence in the industry despite modest short-term tourism outlooks. CBRE Hotels survey has discovered that 90% of hotel-industry participants in Australia and New Zealand are looking to maintain or increase their stake in the sector.
The survey results showed clear signs of recovery in the Hotel industry as tourism across two countries gains momentum following two years of closed borders.
The survey quizzed more than 70 hotel owners, investors, developers and industry consultants, covering topics including revenue recovery and asset values.
Respondents were asked whether their investment outlook for the sector had changed since early 2020. 50% indicated they would invest more, with a further 38% answering their investment level would remain the same.
The regained confidence is particularly notable given that 62% of participants believe it will take three-to-five years for international arrival numbers in Australia and New Zealand to recover to 2019 levels.
CBRE Hotels Managing Director, Capital Markets, Michael Simpson, believes the strong results highlight the industry’s optimism.
“Two-thirds of our survey respondents see growth in asset prices over the medium term, in line with recovering visitation.”
Michael Simpson, CBRE Hotels Managing Director, Capital Markets
The majority of respondents put the same three to five year timeframe on revenue per available room (RevPAR) returning to 2019 figures on an annualised basis in Auckland (69%), Melbourne (63%), Sydney (54%) and Perth (46%).
There was a more positive outlook surrounding the RevPAR bouncing next year in Brisbane (51% of respondents) and Adelaide (49%).
Half of the survey participants anticipate higher interest rates to flow into yields, but 58% don’t believe inflation will result in stronger average daily rate (ADR) growth.
Capital city hotel values are expected to rise over the next three years, with 55% expecting growth of up to 10% and 11% anticipating even larger rises.
“Queensland and New South Wales are clearly the markets attracting the most interest, with Sydney also expected to be 2023’s strongest-performing city,” Mr Simpson added.
The most attractive markets for hotel purchases or development are Queensland and New South Wales, with just over three-quarters of respondents expressing an interest in those two states.
That coordinated with the highest ranking cities being Sydney, the Gold Coast and Brisbane. These cities are expected to perform most strongly over the coming year.
