Major infrastructure and property development projects will create significant demand in the Perth hotel sector - benefiting existing hotels and new projects - according to a new market review from CBRE .
Major projects, including Elizabeth Quay, City Link, Cathedral Precinct, Burswood Stadium and the $750 million upgrade of Perth’s Domestic and International Airports, are among those highlighted in the CBRE Hotels review, which calls into question recent speculation about a potential surplus of hotel rooms in Perth.
CBRE Hotels Senior Director David Kennedy said the level of current and proposed development activity would create demand that had not seen before in the Perth hotel market, to the benefit of existing hotels as well as new room supply.
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“This progressive development will combine to create Perth as a true international city and encourage both tourism and corporate activity - but only if new room supply occurs,” Mr Kennedy noted.
“It’s not that long ago that the Perth Convention and Exhibition Centre suffered from lost conventions and conferences because of our room shortage. Perth was also lucky to host CHOGM in recent times, with visitors for this conference forced to stay as far away as Mandurah and The Vines and Joondalup Country Clubs, up to 70km from the CBD.”
Recent industry reports have focused on the potential for over 2,000 short stay hotel rooms to be delivered to the Perth market by 2018.
However, Mr Kennedy said this did not represent a glut in light of the significant infrastructure and property developments underway or in the pipeline, adding that consideration must also be given to the different levels of accommodation to be produced in the city.
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He added that Perth’s economy - while subject to a series of peaks and troughs over time - had been a growth story, on a median basis, in the past decade.
“While the downturn in the mining sector has clearly impacted Perth, economists are predicting better times within two years. Much of the hotel product under construction or in the pipeline will not be completed for three years, which will be perfect timing for the next wave of demand,” Mr Kennedy said.
CBRE’s review highlights a series of major infrastructure and development projects in Perth, including: