STR: Australia surpasses 300,000 hotel rooms
 
STR: Australia surpasses 300,000 hotel rooms
09 DECEMBER 2019 9:53 AM

The supply of hotel rooms in Australia surpassed 300,000 as of November, according to STR and AM:PM.

ADELAIDE—Openings in November pushed Australia’s hotel inventory above 300,000 open rooms, according to data from STR. Australia ranks 12th in the world in total room count and fourth among countries in the Asia Pacific region.

According to the most recent figures in STR’s AM:PM platform, the country features 5,600 hotel properties and 300,229 rooms. STR defines a traditional hotel on three exclusionary criteria: 1) generates revenue on a nightly per-room basis, 2) has 10 or more rooms and 3) is open to the public (excludes those properties requiring membership, affiliation or club status).

“Australia has been on a progressive development path since 2016 with more than 26,000 rooms added to the marketplace,” said Matthew Burke, STR’s Regional Manager – Pacific. “That is not counting the more than 5,000 rooms that were closed during that period and converted for alternative commercial usage. This uptick in investment reflects the country’s strong performance, especially in major markets. As a whole, Australia’s occupancy has been at or near 75% for each of the last five years, and average daily rate has consistently ranged around 185 Australian dollars.”

The 10 largest STR-defined markets in Australia represent 57.1% of all rooms in the country, led by Sydney with 43,841 rooms. While each hotel class is well-represented in the country’s overall numbers, the largest percentage of rooms sit in the Upscale (24.2%) and Midscale (23.6%) segments. The Upscale class has seen the largest influx of new supply with 10,931 rooms opened since 2015.

Among branded inventory only in the country, Accor represents the largest market share with 32.1% of rooms. The Ascott Limited is a distant second at 7.6%.

Australia also shows 94 projects and 18,294 rooms in construction as well as 216 projects and 36,005 rooms in the two planning phases of the pipeline.

“Australia is not likely to hit its construction peak until next year, and we don’t expect a substantial slowing in development anytime over the next several years,” Burke said. “Melbourne, Hobart and Adelaide are projected to see the largest increase based on their existing room counts, and the two highest-tiered segments (Luxury and Upscale) will combine to welcome 35% of the new rooms in the pipeline.

“As we have seen in the data this past year, all of this new supply has put some pressure on occupancy levels, and subsequently, hotelier pricing confidence. Moving forward we anticipate demand growth in almost all markets, but with sustained supply increases, we’re still forecasting occupancy declines in the short term. Room rates will of course be weighed by the additional competition in the market, but that is not likely to become a long-term trend as many markets trade at high absolute occupancy levels with the ability to absorb new supply.”

A note to editors
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About STR
STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.

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