Cairns Hotels Cash in on Tourism Boom

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Monday, November 17th, 2014
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As the tourism sector in Australia recovers, hotels throughout Tropical North Queensland and Cairns in particular are cashing in, using higher levels of occupancy and demand to increase room rates and prices.

Research firm Jones Lang LaSalle says leisure hotel operators in Queensland’s northernmost city booked an average 27.9 per cent surge in revenue per available RevPAR room in the month of September compared with the same month last year, while on a year-to-date basis RevPAR is up an impressive 10.2 per cent.

Julian Whiston of JLL said that while the G20 finance ministers and Central Bank governors’ meeting was most likely the primary driving factor behind September’s abnormal result, the market was also being driven by a broader recovery in tourism numbers, with hotel operators benefiting from the city’s proximity to natural assets as well as the easing in the Australian dollar.

“There is no doubt that the long-term appeal of Cairns and other TNQ markets are their proximity to the Great Barrier Reef, the Daintree Rainforest and the region’s tropical climate,” Whiston said.

Around Australia, operators of hotels and tourist accommodation have experienced generally soft conditions in recent years as weak global economic conditions and the strong Australian dollar impacted tourism numbers.

Since the dollar’s fall, however, tourism numbers have recovered, with year to date figures showing a rise in inbound tourism of 11.3 per cent and a 9.5 per cent rise in individuals attending business conferences.

In the case of Tropical North Queensland, the region has also benefited from an increase in domestic tourists, with the latest figures from Tourism Australia showing domestic visitor nights in the region up 9.4 per cent in the first half of the year.

Going forward, JLL managing director of investment sales Mark Durran says the region will benefit from the availability of an increasing number of five star resorts as well as the broader tourism recovery.

“The tourism market in Cairns bottomed out in 2011 and what we are seeing is the return of both overseas and domestic travellers who want to explore more of tropical Queensland,” he said.

The room rates surge in Cairns also comes amid a broader recovery in the Queensland market, which has also seen a rise in RevPAR of more than 10 per cent for hotels in the Gold Coast, for example, and is hoping to capitalise on the flow on effect from the G20 in Brisbane.

Queensland Hotels Association president Tom McGuire said recently that the event would be an opportunity to showcase the city and state’s accommodation offerings as well as to raise the profile of the city in terms of holding significant events.

In the more immediate term, Whiston says the immediate benefits of the G20 cannot be understated, and that “we would expect to see growth in both foreign and domestic tourism in and around this event.”

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