A new CBRE study shows that the demand for hotel rooms in Australia could reach up to 1.9 millions per year.
CBRE’s “From Runway to Room Nights” report shows that 56 new routes added 10,500 additional flights annually into key Australian cities. It’s a major shift in Australia’s travel capacity.
Ally Gibson, CBRE’s Director of Hotels Research, said that this air connectivity will help to drive a new recovery phase for Australia’s Hotel Sector and have direct consequences for hotel performance.
Ms Gibson noted that increased capacity from key markets, including China, India Southeast Asia North America, and the Middle East, is expected to continue driving a recovery in international arrivals. Aviation’s role will be reinforced as a crucial lever for tourism growth and hotel sector development.
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As these new services mature, and as inbound tourism continues to recover, it is expected that the increase in demand will lead to higher occupancy and RevPAR rates across key markets, especially since Australia’s hotel pipeline has entered a period of limited supply due to escalating costs and productivity restrictions.
CBRE’s analyses takes into account every route, by airline, origin and frequency, as well as aircraft type. The data was used to translate new short-term international arrivals into projected hotel night demand and occupancy effects.
CBRE estimates that by 2026 these new flights will generate demand for 1.9 million hotel rooms nights across Australia. This could lead to an increase in hotel occupancy of around 3.4%.
Troy Craig, CBRE Hotel’s Troy Craig, noted that “supply constrained markets like Brisbane, Perth, and Cairns, are especially well-positioned to benefit from new flight routes, which translate directly into an increase in performance.” Sydney and Melbourne are also expected to maintain high levels of international arrivals due to their strong corporate and leisure demand, as well as major events.
CBRE’s research shows that Sydney will see the biggest increase in demand. 13 new flights are expected to generate 390,000 extra short-term arrivals, and to drive 542,000 additional room nights by 2026.
Melbourne will be able to benefit from the addition of 12 new routes. This is expected to add around 306,000 short term arrivals, and 409,000 hotel nights by 2026. The increase in demand will help absorb recent additions as hotel supply starts to slow down.
Perth will experience the largest percentage increase in international arrivals with nine new direct flights, primarily from Southeast Asia, the Middle East and Africa. With 298,000 new arrivals on short-term stays, this is expected to generate 339,000 extra room nights.
The new flights from Brisbane are in line with the strategic growth of inbound travel and capacity gain following completion of its second airport. Eight new routes, including those from North America and Asia, are expected to bring in around 214,000 short-term visitors and generate demand for 267,000 hotel nights.
Adelaide expects to receive around 143,000 extra short-term tourists, with direct flights from San Francisco, Auckland and other international destinations.
Cairns will continue to evolve into a premium year-round leisure market with the addition of seven new flights routes, which are expected to bring in around 120,000 short-term arrivals and generate 104,000 expected room nights.
