Perth room boom brings prices down

With more hotels setting up in Perth, the price of rooms and occupancy rate is coming down.

Indeed, the occupancy level is now the lowest it’s been in 12 years.

According to the latest Deloitte Access Economics’ tourism and hotel market outlook report, it’s just going to keep growing.

The report predicts a “bulge in the supply pipeline” peaking this year with another 720 hotel rooms coming online.

While the number of nights stayed in Perth hotels over the past year had remained stable, the big concern for hoteliers is the new wave of stock coming through.

Perth got six new hotels last year, five of them since May.

The big one was the December opening of the six-star Crown Towers.

That was the first of 24 new hotels to open in and around Perth over the three years,

All this will add almost 4000 rooms to the local market at a cost of more than $3 billion.

“Perth ... hoteliers will continue to feel the double-pinch of increased competition from new entrants, along with moderate demand growth compared to the mining boom peaks of five years ago,” says the Deloitte report.

Only five years ago, the state government was talking about a big shortage of hotel rooms in Perth threatening the sustained viability of the city’s tourist industry.

And occupancy rates are coming down in the west. Tasmania (81.6 per cent) has now overtaken Perth (80.2 per cent). The cities with the highest occupancy rates are Sydney (89 per cent) and Melbourne (88 per cent).

The tourism industry is driving this trend.

According to Deloitte, it’s growing at a record pace.

Added to that is the number of Australians holidaying at home. Just over the past year, that’s grown by 8.2 per cent.

“Successful promotional campaigns on food, wine and coastal tourism have contributed to ... double-digit visitor night growth for WA and Southern Australia,” consultant Bryon Merzeo told the West Australian.

by Leon Gettler, February 24^th 2017