• The hotel market is beginning to see lower occupancy across major cities. According to STR, Sydney, Melbourne, Brisbane and Cairns saw declines in occupancy over the past year.

 

  • The strong rates of growth seen in Sydney and Cairns in particular have evaporated, indicating that after a number of stellar years these markets may have peaked and perhaps starting to turn.

 

  • Melbourne and Brisbane have had large volumes of supply added to market over the past 18 months, hampering growth in RevPAR. Additional supply in Melbourne over the next two years will continue to weigh on performance.

 

  • Going forward, demand for hotel rooms should remain strong thanks to a weakening Australian dollar. The AUD has fallen against the USD by ~10% over the course of this year and will encourage domestic travel as international travel becomes more expensive as a result.