And over the next three years the domestic travel outlook is set to strengthen, with people increasingly opting to holiday at home rather than abroad, according to Deloitte Access Economics’ Tourism and Hotel Market Outlook.
The Australian dollar is down and tourism is up
The outlook for Australian tourism has not been more encouraging since before the GFC, as buoyant market conditions boost visitor numbers. Higher visitor numbers in 2014 were also helped by major events: the G20 being among one of the big drawcards.
(It will be interesting to see the data published for this period due to the irregular events that recently took place, including the Asian Football Cup and the ICC Cricket World Cup which are large international draw cards.)
We have seen international and domestic tourism in Australia experience the fastest growth in 10 years. The fall of the Australian dollar and oil prices, while not unexpected, have fuelled growth prospects and been sharper than anticipated.
As the effects work through tourism markets over coming months, its full impact on travel flows will become apparent. Certainly, its positive effects are some way from fully materialising.
High demand for hotel rooms
With international visitors continuing to be drawn to Australia in record numbers, and domestic visitor nights growing at their fastest pace in two decades, the Australian hotel sector has had another very positive year.
Sydney and Melbourne’s occupancy rates have charted higher and higher, regularly reaching over 90% on peak nights during 2014.
Although the pipeline of new hotel developments remains healthy, the number of rooms in the three year pipeline is 15% lower than this time last year. The number of new projects on the cards remains modest relative to the demand outlook.
Nevertheless, the major contributors in terms of rooms in Sydney will be the three major hotels around the Darling Harbour precinct, including the rebuilt Convention Centre, the Four Points by Sheraton and the Crown Casino complex at Barangaroo.
In comparison, the receding mining construction boom is apparent in Perth and Brisbane as the conditions there remain subdued.
The Outlook indicates a broad geographic shift to the south east with the transition away from resource sector dependency, suggesting great growth potential for Western Sydney.
Deloitte Access Economics’ Tourism and Hotel Market Outlook is a subscription based bi-annual publication, with the latest edition launched on 26th February 2015.
For further information on subscriptions please contact Bryon Merzeo bmerzeo@deloitte.com.au.
