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8634.0 - Tourism Indicators, Australia, Jun 2001  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 13/11/2001   
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INTRODUCTION

Anticipated increases in demand for accommodation lead developers and tourism bodies to make decisions to expand capacity. In recent years, the industry anticipated a high demand due to the Olympic Games and Paralympic Games being held in Sydney in 2000. This article examines statistics about the actual and intended construction of new tourist accommodation since 1998, mainly focusing on the construction of large (in terms of dollars spent) establishments. The data are sourced from three ABS surveys: the Building Activity; Building Approvals; and Tourist Accommodation Developments surveys.


CONSTRUCTION OF TOURIST ACCOMMODATION

Australia

During calendar year 2000 the value of short-term tourist accommodation completed reached its highest level since 1989, up 21% to $1,320.1 million when compared to 1999 (see graph F1.1). This increase was driven by New South Wales (see graph F1.4) and is likely to be partly due to the completion of new tourist accommodation in time for the Olympic and Paralympic Games.

Graph F1.1 VALUE OF COMPLETED TOURIST ACCOMMODATION BUILDINGS,


Large value construction projects

Much of the growth in activity occurred in accommodation developments with an approved building value of $2 million or more which increased 21% to $1,580 m between 1998 and 1999 and 26% to $1,997m between 1999 and 2000 (see table F1.2). These values include the cost of land and landscaping.


F1.2 Completed tourist accommodation buildings, projects valued at $2 million or more

Completed by

percentage change 1999 to 2000
31 Dec 1998
31 Dec 1999
31 Dec 2000
%

Number of rooms, units (excluding refurbishments)
Hotels, motels, guest houses,serviced apartments
(a) 5,618
6,541
7,475
14.3
Star grade 2
101
103
80
-22.3
Star grade 3
1,221
828
1,564
88.9
Star grade 4
3,362
3,892
3,484
-10.5
Star grade 5
637
1,132
2,267
100.3
Unknown
297
586
80
. .
Holiday flats and units
(b) 1,766
657
230
-65.0

Hotels, motels, guest houses, serviced apartments, holiday flats and units
7,384
7,198
7,705
7.0

Other tourist accommodation
Caravan parks
Powered sites
-
-
123
. .
Visitor/backpacker hostels bed spaces
-
-
340
. .

Total value of all projects (including refurbishments)(c) ($m)
1,307
1,580
1,997
26.4

Notes:
nil or rounded to zero
. . not applicable
(a) Excludes serviced apartments. For the 1998 survey, holiday flats and serviced apartments were grouped together. From the 1999 survey on, serviced apartments were included with hotels, motels and guest houses while holiday flats were shown separately.
(b) Includes serviced apartments. See footnote a.
(c) Includes the value of any new land and landscaping. Excludes the Goods and Services Tax.
Source: Tourist Accommodation Developments Survey.

A detailed breakdown of accommodation type and star grading is available for tourist accommodation buildings valued at over $2m. From this it can be seen that most of the new rooms were in the hotel, motel, guest house and serviced apartment category. The number of rooms in this group of establishments grew 14% between 1999 and 2000. There were comparatively few new developments of holiday flats and units. Caravan park or visitor hostel developments were even more rare, with none taking place in 1998 or 1999. In 2000, there was only one caravan park and three backpacker hostels which involved developments worth $2m or more (see table F1.2).

Most of the new rooms and units built in 1999 and 2000 were graded as 4 or 5 star accommodation. These two gradings accounted for nearly four-fifths (77%) of all rooms and units built in hotels, motels, guest houses and serviced apartments in both these years (see table F1.2).

States and Territories

New South Wales was the only State to record increases in the value of hotels, motels and other short term accommodation completed in both 1999 and 2000, when compared to the previous calendar year. The value of such accommodation increased by 31% in 1999 (compared to 1998) and 39% in 2000 (compared to 1999). By the end of 2000, New South Wales accounted for 52% of completed new tourist accommodation buildings, up from 36% in 1998. Conversely, Queensland's share of completed new tourist accommodation fell from 32% in 1998 to 23% in 1999 before recovering slightly to 25% by 2000 (see table F1.3).


F1.3 Value of completed tourist accommodation buildings (a) by State, projects valued at $50,000 or more

1998
$m
1999
$m
2000
$m
NSW
372.0
488.9
680.7
Vic.
180.0
236.3
204.1
Qld
333.6
252.7
336.1
SA
39.3
29.6
17.6
WA
85.7
63.1
52.8
Tas.
8.6
3.8
3.9
NT
0.4
10.1
6.4
ACT
10.6
7.6
18.4


Notes:
(a) Includes hostels, boarding houses, guest houses and holiday apartment buildings. Excludes the value of land and landscaping.
Source: Building Activity Survey.

The State dissection is remarkably similar in terms of the number of new rooms completed at the top end of the market (that is, developments valued at over $2m). New South Wales had by far the largest number of completed new rooms (3,912) in 2000, accounting for over half (52%) of all new rooms. Compared to 1999 the number of new rooms completed in New South Wales grew by 61%. Victoria and Queensland also had strong growth in capacity during 2000, with the number of new rooms up 34% and 16% respectively on 1999 compared to 1998. The other States and the Australian Capital Territory recorded falls in the number of new rooms completed during 2000 compared to 1998 and 1999 (see graph F1.4). Tasmania recorded no developments worth more than $2m during the three-year period.

Graph F1.4 ROOMS COMPLETED BY STATE,


The rooms built during 1998, 1999 and 2000 in developments worth $2m or more were more commonly graded as 4 and 5 star in all States and Territories, although in New South Wales this pattern was less pronounced (see graph F1.5).

Graph F1.5 ROOMS GRADED AS 4 OR 5 STAR ACCOMMODATION.


FUTURE TRENDS IN CONSTRUCTION OF TOURIST ACCOMMODATION

Current work

While the value of completed tourist accommodation construction projects has been increasing, the value of work yet to be done and work under construction has been declining (see graph 1.6). Similarly, the value of work commenced during 2000 declined by 50% when compared to 1999 (see graph F1.7).

Graph F1.6 VALUE OF TOURIST ACCOMMODATION WORK,

Graph F1.7 VALUE OF TOURIST ACCOMMODATION WORK COMMENCED,


These patterns are also apparent in approvals for construction of new short-term accommodation. During 2000 approvals declined by 42% compared to 1999 (see graph F1.8). Only Tasmania and South Australia recorded increases in the value of approvals and new building commencements in 2000 compared to 1999, indicating that the value of work completed in most States is set to decline in 2001.

Graph F1.8 VALUE OF TOURIST ACCOMMODATION BUILDINGS APPROVED,


Future expectations

Statistics on expected tourist accommodation developments valued at $2m or more also indicate a slump in the construction of these buildings during 2001. The value of projects expected to be completed in 2001 is down 81% compared to activity during 2000. The figures indicate a similar fall (74%) in the number of rooms or units expected to be completed during 2001 (table F1.9).

F1.9 Expected construction of tourist accommodation, projects valued at $2 million or more
Completed by
Expected to be completed by
31 Dec 2000
31 Dec 2001
Number of rooms, units (excluding refurbishments)
Hotels, motels, serviced apartments, holiday flats and units
7,705
1,980
Other tourist accommodation
Caravan parks
Powered sites
123
-
Visitor/backpacker hostels bed spaces
340
500
Total value of all projects (including refurbishments)(a) ($m)
1,997
388

Notes:
nil or rounded to zero
(a) Includes the value of any new land and landscaping. Excludes the Goods and Services Tax.
Source: Tourist Accommodation Developments Survey.

While these are expectations only, the corresponding data for 1999 and 2000 align closely with the actual completed developments (see graph F1.10). Approximately 90% of the rooms actually completed in 1999 and 2000 were identified as expected to be completed in the previous year. The expected value of these developments slightly over-stated the actual value of the developments.

Graph  F1.10 EXPECTED CONSTRUCTION OF TOURIST ACCOMMODATION BUILDINGS,


The declining activity in 2001 may be partly due to the large gap between the supply of hotel, motel, guest house and serviced apartment accommodation and the demand for this accommodation. This is further evidenced by declining occupancy rates over the last 12 months (even during the Olympic and Paralympic Games when increased capacity exceeded demand) (see graph F1.11). A post-Olympic slump in construction developments after large increases in the lead up to the Olympics is another likely contributor.

Graph F1.11 OCCUPANCY RATES



CONCLUSION

There has been considerable growth in short term tourist accommodation establishments, particularly hotels, motels, guest houses and serviced apartments, up until December 2000. Much of this growth has been in New South Wales 4 or 5 star grade accommodation in the lead-up to the Olympics. The statistics for future tourist accommodation development work (approvals, work commenced and the work expected to be completed in 2001) indicate that the pace of tourist accommodation development is slowing significantly.


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