August 2017 – Australian/New Zealand Accommodation Hotel Market

8 August, 2017 / Vanessa Rader and Andrew Jolliffe

The Australian and New Zealand hotel markets have overall had some impressive results over the last few years. While some markets have performed better than others, this has been dependant on supply of new stock and the ability to attract both offshore and domestic visitor numbers with local attractions or events.The Australian and New Zealand hotel markets have overall had some impressive results over the last few years. While some markets have performed better than others, this has been dependant on supply of new stock and the ability to attract both offshore and domestic visitor numbers with local attractions or events.

The underlying international story has been strong given the favourable AUD which has seen an uplift in international visitor arrivals, while strong employment results particularly within Sydney and Melbourne has seen corporate travel also rebound this year.

There has been over $2billion transact across Australian hotels over the 2016/2017 financial year with an additional NZD$109.34million in New Zealand. The bulk of these sales were completed in Melbourne and Sydney including a number of high profile transaction of brands such as Hilton, Sheraton and Novotel most notably to overseas buyer groups. Large accommodation hotel transactions have historically been dominated by offshore buyers particularly from South East Asia looking to secure known, landmark assets. Yields have been mixed across these assets depending on size, quality and location, with sub 5.00% yields achieved for prime holdings. This financial year also has seen a number of portfolio sales (not included in chart above), these include the Accor IBIS portfolio of 15 facilities worth over $200million and the Outrigger portfolio in late 2016.

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