Executive Summary – Australia · 2019-07-30 · RevPAR increasing by 4.1% Darwin builds occupancy...
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Month Hotel Number of Rooms Price Per Room October Sheraton Melbourne – VIC 174 $775,862 September Nobby's Outlook, Gold Coast – QLD 37 $641,892 September Mercure Treasury Gardens Melbourne – VIC 164 $426,829 August All Seasons International Bendigo – VIC 77 $311,688 August Ibis Styles Narrabundah – ACT 207 $132,850 August Sebel Mandurah, Perth – WA 84 $178,571 August Aire Serviced Apartments, West Perth – WA 64 $195,313 August Quest Nowra – NSW 81 $216,049 July Quest Cannon Hill – QLD 100 $238,500 Source: RCA Recent Sales Transactions City Occupancy OCC YTD Growth % ADR ADR YTD Growth % RevPAR RevPAR YTD Growth % Australia 75.4% 0.7% $183.44 1.6% $138.40 2.3% Sydney 85.8% 1.2% $222.96 5.0% $191.20 6.2% Melbourne 82.4% -0.4% $182.62 0.8% $150.48 0.5% Canberra / ACT 77.1% 4.7% $174.29 6.7% $134.35 11.8% Hobart 79.1% -1.1% $169.02 2.5% $133.71 1.4% Gold Coast 70.7% -1.6% $182.17 1.2% $128.81 -0.4% Cairns 84.3% 1.6% $149.42 7.7% $125.89 9.4% Perth 73.5% -6.1% $168.34 -7.7% $123.79 -13.3% Adelaide 77.7% 1.5% $151.40 2.5% $117.67 4.1% Darwin 73.1% 7.3% $156.89 -4.2% $114.65 2.8% Brisbane 73.1% 3.2% $154.28 -3.4% $112.78 -0.3% Source: STR Australia and City Hotel Market Operating Performance YTD September 2017 September Quarterly Update Savills Hotels Market Performance (YTD September 2017) Australia wide RevPAR increases 2.3% Best RevPAR growth markets: Canberra (up 11.8%) Cairns (up 9.4%) Sydney (up 6.2%) Worst RevPAR performing market: Perth (down 13.3%) Sydney continues to outperform Australian markets with a RevPAR gap of $40+ over the next best market performer (Melbourne wide market) Sydney Luxury hotels achieved 89% Occ and $344 ADR, contributing to RevPAR growth of 9.8% to record $305 RevPAR, which is $35 ahead of Melbourne’s Luxury market (90% Occ, $298 ADR and $269 RevPAR) Melbourne continues to struggle to grow as new supply enters the market Canberra government and corporate activity continues to boost room night demand with the highest RevPAR growth for the period Hobart displays modest growth achieving the fourth highest RevPAR across Australia Gold Coast RevPAR flattens Cairns continues to perform strongly recording the second highest RevPAR growth for the period Perth continues to fall with ADR decreasing by $14 due to new supply exceeding room night demand growth and a 50% jump in Airbnb listings to more than 8,000 Adelaide displays continued growth with RevPAR increasing by 4.1% Darwin builds occupancy by 7.3% as ADR falls by 4.2% to achieve a modest increase in RevPAR Brisbane almost maintains YOY RevPAR International/Domestic Visitor Highlights (Y/E June 2017) International – 7.9m Visitors (up 9%) & 266m Visitor Nights (up 7%) Domestic – 93.7m Visitors (up 5%) & 338m Visitor Nights (up 4%) Economic Update Australia Australia GDP of 2.2% in 2017 increasing to 2.9% in 2018 and 3% in 2019 will underpin continued economic activity Current RBA cash rate of 1.5% unlikely to move in 2017 with markets not expecting a further increase until 2019 The World World GDP growth is expected to become more supportive, rising from 3.2% in 2016 – the lowest since the GFC – to 3.7% in 2017, 2018 and 2019 China remains a critical determinant of Australia’s economy with GDP of 6.8% in 2017 which is forecast to fall to 6.5% in 2018 as Xi Jinping’s newly formed Politburo remains omnipresent over economic policy whilst allowing the market to continue its role in driving China’s economy Other key country contributors to global GDP represent USA (2.2%), Japan (1.5%) and Europe (2.2%) Capital Markets – Australia With only 10 transactions recorded YTD (with sale value exceeding $5M) frustrated capital continues the struggle to find hotel assets The dearth of existing hotels for sale is fuelling investor appetite for new hotel development opportunities The lack of assets for sale is resulting in further cap rate compression, however latest data for YTD Sept 2017 show that passing yields are creeping back up to 7.32% compared to 6.85% CY 2016 so perhaps pricing is starting to normalise after a hectic few years of sales activity It appears that continued cap rate compression is isolated to upscale/luxury hotels in key city locations, which shows no signs of slowing despite the slowdown of Chinese capital Counter cyclical opportunities in Perth and Brisbane are becoming increasingly popular Executive Summary – Australia
Transcript of Executive Summary – Australia · 2019-07-30 · RevPAR increasing by 4.1% Darwin builds occupancy...
Month Hotel Number of Rooms Price Per Room
October Sheraton Melbourne – VIC 174 $775,862
September Nobby's Outlook, Gold Coast – QLD 37 $641,892
September Mercure Treasury Gardens Melbourne – VIC 164 $426,829
August All Seasons International Bendigo – VIC 77 $311,688
August Ibis Styles Narrabundah – ACT 207 $132,850
August Sebel Mandurah, Perth – WA 84 $178,571
August Aire Serviced Apartments, West Perth – WA 64 $195,313
August Quest Nowra – NSW 81 $216,049
July Quest Cannon Hill – QLD 100 $238,500
Source: RCA
Recent Sales Transactions
City Occupancy OCC YTD Growth %
ADR ADR YTD Growth %
RevPAR RevPAR YTD Growth %
Australia 75.4% 0.7% $183.44 1.6% $138.40 2.3%
Sydney 85.8% 1.2% $222.96 5.0% $191.20 6.2%
Melbourne 82.4% -0.4% $182.62 0.8% $150.48 0.5%
Canberra / ACT 77.1% 4.7% $174.29 6.7% $134.35 11.8%
Hobart 79.1% -1.1% $169.02 2.5% $133.71 1.4%
Gold Coast 70.7% -1.6% $182.17 1.2% $128.81 -0.4%
Cairns 84.3% 1.6% $149.42 7.7% $125.89 9.4%
Perth 73.5% -6.1% $168.34 -7.7% $123.79 -13.3%
Adelaide 77.7% 1.5% $151.40 2.5% $117.67 4.1%
Darwin 73.1% 7.3% $156.89 -4.2% $114.65 2.8%
Brisbane 73.1% 3.2% $154.28 -3.4% $112.78 -0.3%
Source: STR
Australia and City Hotel Market Operating Performance YTD September 2017
September Quarterly UpdateSavills Hotels
Market Performance (YTD September 2017) � Australia wide RevPAR increases 2.3%
� Best RevPAR growth markets: Canberra (up 11.8%) Cairns (up 9.4%) Sydney (up 6.2%)
� Worst RevPAR performing market: Perth (down 13.3%)
� Sydney continues to outperform Australian markets with a RevPAR gap of $40+ over the next best market performer (Melbourne wide market)
� Sydney Luxury hotels achieved 89% Occ and $344 ADR, contributing to RevPAR growth of 9.8% to record $305 RevPAR, which is $35 ahead of Melbourne’s Luxury market (90% Occ, $298 ADR and $269 RevPAR)
� Melbourne continues to struggle to grow as new supply enters the market
� Canberra government and corporate activity continues to boost room night demand with the highest RevPAR growth for the period
� Hobart displays modest growth achieving the fourth highest RevPAR across Australia
� Gold Coast RevPAR flattens
� Cairns continues to perform strongly recording the second highest RevPAR growth for the period
� Perth continues to fall with ADR decreasing by $14 due to new supply exceeding room night demand growth and a 50% jump in Airbnb listings to more than 8,000
� Adelaide displays continued growth with RevPAR increasing by 4.1%
� Darwin builds occupancy by 7.3% as ADR falls by 4.2% to achieve a modest increase in RevPAR
� Brisbane almost maintains YOY RevPAR
International/Domestic Visitor Highlights (Y/E June 2017) � International – 7.9m Visitors (up 9%) & 266m Visitor Nights (up 7%)
� Domestic – 93.7m Visitors (up 5%) & 338m Visitor Nights (up 4%)
Economic UpdateAustralia � Australia GDP of 2.2% in 2017 increasing to 2.9% in 2018 and 3% in 2019 will underpin continued economic activity
� Current RBA cash rate of 1.5% unlikely to move in 2017 with markets not expecting a further increase until 2019
The World � World GDP growth is expected to become more supportive, rising from 3.2% in 2016 – the lowest since the GFC – to 3.7% in 2017, 2018 and 2019
� China remains a critical determinant of Australia’s economy with GDP of 6.8% in 2017 which is forecast to fall to 6.5% in 2018 as Xi Jinping’s newly formed Politburo remains omnipresent over economic policy whilst allowing the market to continue its role in driving China’s economy
� Other key country contributors to global GDP represent USA (2.2%), Japan (1.5%) and Europe (2.2%)
Capital Markets – Australia � With only 10 transactions recorded YTD (with sale value exceeding $5M) frustrated capital continues the struggle to find hotel assets
� The dearth of existing hotels for sale is fuelling investor appetite for new hotel development opportunities
� The lack of assets for sale is resulting in further cap rate compression, however latest data for YTD Sept 2017 show that passing yields are creeping back up to 7.32% compared to 6.85% CY 2016 so perhaps pricing is starting to normalise after a hectic few years of sales activity
� It appears that continued cap rate compression is isolated to upscale/luxury hotels in key city locations, which shows no signs of slowing despite the slowdown of Chinese capital
� Counter cyclical opportunities in Perth and Brisbane are becoming increasingly popular
Executive Summary – Australia
Share of Total Visitors ('STV')
Total Visitor Nights ('TVN '000)
Total Visitors ('TV '000')
Share of Total Visitor Nights ('STVN') Visitor Nights Annual Growth YOY ('VNAG')
Visitors Annual Growth YOY ('VAG')
VIC
Int'l DomesticTV '000 2 761 23 180STV 35.1% 24.7%VAG 7.7% 9.2%TVN '000 67 380 66 472STVN 25.3% 19.7%VNAG 14.6% 6.3%
NT
Int'l DomesticTV '000 302 1 612STV 3.8% 1.7%VAG 8.2% 4.4%TVN '000 3 912 9 430STVN 1.5% 2.8%VNAG 2.9% 3.4%
QLD
Int'l DomesticTV '000 2 619 21 453STV 33.2% 22.9%VAG 5.6% 6.2%TVN '000 53 912 83 699STVN 20.3% 24.8%VNAG 3.7% 6.3%
TAS
Int'l DomesticTV '000 253 2 701STV 3.2% 2.9%VAG 13.0% 15.9%TVN '000 3 949 11 244STVN 1.5% 3.3%VNAG 15.8% 10.6%
WA
Int'l DomesticTV '000 966 9 456STV 12.3% 10.1%VAG 8.8% -5.3%TVN '000 28 198 41 903STVN 10.6% 12.4%VNAG 1.1% -8.0%
ACT
Int'l DomesticTV '000 221 2 649STV 2.8% 2.8%VAG 9.1% 5.2%TVN '000 4 584 6 704STVN 1.7% 2.0%VNAG -8.0% 4.5%
NSW
Int'l DomesticTV '000 4 008 30 122STV 50.9% 32.1%VAG 9.9% 5.6%TVN '000 92 516 96 876STVN 34.8% 28.7%VNAG 6.5% 5.9%
SA
Int'l DomesticTV '000 435 6 158STV 5.5% 6.6%VAG 3.1% 0.5%TVN '000 10 935 21 586STVN 4.1% 6.4%VNAG 13.6% -0.5%
International & Domestic Visitors – Who Goes Where?2 Year Ending June 2017
1 Source: Tourism Research Australia
2 Share of total visitors for both International and Domestic Visitors exceeds 100% due to multiple state visits. Source: Tourism Research Australia
Top 10 International Visitor Markets1 Year Ending June 2017
USA
TV '000 706STV 9.0%VAG 14.1%TVN '000 15 142STVN 5.7%VNAG 7.1%
Korea
TV '000 269STV 3.4%VAG 12.4%TVN '000 11 823STVN 4.4%VNAG -7.5%
UK
TV '000 682STV 8.7%VAG 2.6%TVN '000 24 372STVN 9.2%VNAG -2.6%
India
TV '000 261STV 3.3%VAG 14.8%TVN '000 14 716STVN 5.5%VNAG 4.4%
New Zealand
TV '000 1 229STV 15.6%VAG 2.2%TVN '000 14 396STVN 5.4%VNAG -5.6%
Singapore
TV '000 385STV 4.9%VAG 3.1%TVN '000 6 533STVN 2.5%VNAG 3.9%
Japan
TV '000 391STV 5.0%VAG 12.7%TVN '000 9 969STVN 3.7%VNAG 10.1%
Hong Kong
TV '000 238STV 3.0%VAG 9.7%TVN '000 7 330STVN 2.8%VNAG -3.3%
China
TV '000 1 161STV 14.7%VAG 9.5%TVN '000 51 463STVN 19.3%VNAG 23.6%
Malaysia
TV '000 359STV 4.6%VAG 12.0%TVN '000 8 650STVN 3.3%VNAG 13.8%
Month Hotel Number of Rooms Price Per Room
March Quest Napier – NZ 44 NZ$151,064
February Bali Bungalows, Auckland – NZ 22 NZ$182,273
Source: RCA
Recent Sales Transactions YTD September 2017
City Occupancy OCC YTD Growth %
ADR ADR YTD Growth %
RevPAR RevPAR YTD Growth %
New Zealand 79.4% 1.0% $186.42 12.4% $148.10 13.5%
Queenstown 84.5% 0.9% $217.60 13.5% $183.91 14.5%
Auckland 83.4% -0.1% $204.41 17.5% $170.56 17.4%
Wellington 77.7% -1.0% $182.42 5.3% $141.69 4.3%
Christchurch 73.3% 2.4% $148.82 1.7% $109.08 4.2%
Source: STR
New Zealand and City Hotel Market Operating Performance YTD September 2017
Market Performance (YTD September 2017) � New Zealand wide RevPAR increases 13.5%
� Auckland and Queenstown continue to perform strongly recording RevPAR growth of 17.4% and 14.5%, respectively
� Queenstown continues to outperform New Zealand markets with a RevPAR gap of $13 over the next best market performer (Auckland)
� Wellington drives higher ADR despite moderate occupancy decline to achieve RevPAR growth of 4.3%
� Christchurch builds occupancy and ADR to achieve RevPAR growth of 4.2%
International Visitor Highlights (Y/E August 2017) � Visitors up 9% to 3.7m
� Visitor Nights up 7% to 16.9m
� Of the top 10 international visitor markets Australia made up 40% of the total share of Visitors, with China following at 11%
� USA, UK, Germany, Canada and India displayed strong double digit growth in Visitors
Domestic Visitor Highlights (Y/E August 2017) � Visitor Nights slightly increased to 22.1m
� Modest increase in Visitor Nights to the North Island (up 1.2%) while Visitor Nights moderately declined in respect to the South Island (down 2.1%)
Economic & Political UpdateNew Zealand � New Zealand GDP of 3.5% in 2017 decreasing to 3% in 2018 and 2.5% in 2019
� Current RBNZ cash rate of 1.75% unlikely to move in 2017
� Jacinda Ardern becomes the country’s third female prime minister, after New Zealand First leader Winston Peters threw his support behind Labour to form a coalition government and end nearly a decade of National rule. Industry will be hoping that a new regime of capitalism under the coalition government will maintain New Zealand’s economic momentum
Executive Summary – New Zealand
Share of Total Visitors ('STV')
Total Visitor Nights ('TVN '000)
Total Visitors ('TV '000')
Share of Total Visitor Nights ('STVN')
Visitor Nights Annual Growth YOY ('VNAG')
Visitors Annual Growth YOY ('VAG')
North Island
Int'l DomesticTVN '000 8,476 14,725STVN 50.0% 66.8%VNAG 7.7% 1.2%
South Island
Int'l DomesticTVN '000 8,467 7,320STVN 50.0% 33.2%VNAG 6.0% -2.1%
International & Domestic Visitors – Who Goes Where?2 Year Ending August 2017
1 Source: Stats NZ (2017). International Visitor Arrivals to New Zealand: August 2017.
2 Source: Stats NZ (2017). Accommodation Survey: August 2017.
Top 10 International Visitor Markets1 Year Ending August 2017
USA
TV '000 321STV 8.8%VAG 20.7%
Korea
TV '000 84STV 2.3%VAG 8.3%
Canada
TV '000 66STV 1.8%VAG 17.7%
UK Germany
TV '000 246STV 6.7%VAG 14.9%
TV '000 104STV 2.8%VAG 13.8%
India
TV '000 57STV 1.6%VAG 17.6%
Australia
TV '000 1 462STV 39.8%VAG 6.3%
Singapore
TV '000 58STV 1.6%VAG 6.2%
Japan
TV '000 102STV 2.8%VAG 5.9%
China
TV '000 404STV 11.0%VAG 0.0%
Michael SimpsonManaging Director +61 (0) 431 649 [email protected]
Contact Us – savills.com.au
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