Perth’s hotel market is set to be the target of an urgent marketing campaign by Tourism Western Australia as occupancy and room rates hit the lowest levels seen in close to a decade.
The Western Australian Government says it will “immediately reprioritise AUD$2 million of its current budget to help fill empty hotel rooms in Perth” as rates at some the leading luxury hotels have dropped as low as AUD$135 a night, well below the AUD$600 and AUD$700 regular prices seen in recent years.
According to the WA Government, “a downturn in business travel, coupled with more hotels coming into the market, saw hotel occupancy rates in June 2017 hit 75.6 per cent, one of the lowest levels seen in seven years”.
The latest STR stats, obtained exclusively by HM, show an even more concerning picture for Perth’s hotels, with occupancy in June 2017 reported as just 67.6 per cent (down from 74.3 per cent in June 2016), alongside ADR dropping from $171.37 to $160.52, and Revenue Per Available Room down to $108.49 from $127.31 the year prior.
The 14.8 per cent decline in RevPAR means Perth is the only market in Australia or New Zealand to report a double digit RevPAR decline for the period and the 9 per cent occupancy decline is also the largest by more than three times compared to the next worst performing city.
Perth has seen a significant influx in new rooms enter the market, with an extra 1,611 hotel rooms have been added to the Perth CBD hotel stock since 2012, including Crown Towers, Peppers Kings Square, Tribe Hotel, Fraser Suites, and Quest Adelaide Terrace. The WA Government says another 1,851 rooms are then scheduled to open by 2020.
“The hotel sector is hurting and we need to focus on direct campaigns that drive visitation to fill planes, get visitors to Perth and fill our hotel rooms,” said Western Australia Tourism Minister, Paul Papalia.
“Tourism WA has been working hard to get the message out there that Perth is no longer expensive and there are plenty of quality accommodation options to choose from.
“This campaign will target markets such as Singapore, Malaysia, China, Sydney and Melbourne where we know people are open to making the decision to travel at short notice.
“Visitor attraction remains the State Government’s number one tourism priority – everything we are doing is about growing visitor numbers to create jobs, develop business opportunities and diversify the economy.
“The $2 million campaign, coupled with the introduction of a Tourism WA East Coast advocate, will lead to a direct increase in visitors,” he said.
Papalia said Tourism WA would work with its co-operative marketing partners, including airlines, travel agents and travel websites, to offer incentives for people to travel now and take advantage of the great choice of hotels at very reasonable rates.
These partners will add to Tourism WA’s financial commitment, bringing the total campaign value well above AUD$2 million, he said.
Australian Hotels Association WA CEO, Bradley Woods, said the new campaigns would be “critically important” for driving tourism and event visits to the Perth and greater WA markets over the next six to eight months.
“We’ve had an enormous increase in room capacity without a corresponding increase in leisure and event visitation, so there are many hundreds of job-creating opportunities that are not materialising and this campaign will put bums on seats, bodies in beds and create the opportunities for the tourism industry to deliver for the State,” he said.
Woods said the campaign was developed in consultation with the AHA and focuses on key markets such as Singapore, Malaysia, China, Sydney and Melbourne.