Markets around Australia are adjusting to new room supply coming on-line in droves.
Markets around Australia are adjusting to new room supply coming on-line in droves.

Revenue Per Available Room (RevPAR) took a tumble in most major Australian cities in December 2018 compared to a year earlier, according to the latest hotel industry data released this week from think-tank STR.

Seven of the ten capital cities and major regional centres saw a decline during a traditional holiday season, with results ranging from a modest -1.1 per cent drop in Sydney through to the Darwin market, where RevPAR fell by nearly a third (-29.3 per cent).

Other poor performing cities included Adelaide (-10.9 per cent), Perth (-9.6 per cent) and Cairns (-9.5 per cent). Cities somewhat saving the team from a complete wipe-out included Hobart (+6.6 per cent), Gold Coast (+3.3 per cent) and Canberra (+0.1 per cent). All up, the national average closed for the month down 1.9 per cent.

The NT capital posted a similar result in the Occupancy metric, recording a 31.2 per cent decrease on the year before.

STR Regional Manager Pacific, Matthew Burke, blamed Darwin’s results squarely on the conclusion of a major gas pipeline project which had sustained the NT capital for over a decade. He warned the results shouldn’t be taken out of context and that overall performance had remained consistent.

“Darwin has sharply felt the impact of the conclusion to the Inpex project that has provided Darwin with historic performance. Reduced demand is the primary reason for the fall in RevPAR.

“Historically, this is the quietest few months for Darwin during the wet season and leisure market campaigns have begun to entice Australians to travel to Darwin as it recalibrates to the new norm.”

Occupancies were generally down across the board however only just fell below even. Room availability was high in all cities, hinting supply was pulling further ahead of demand in all major markets. STR said that while more rooms were being sold, current results reflected a period of transition as new rooms needed time to be fully absorbed by the market.

Burke added that the overwhelming demands of last year’s Ashes cricket series was a factor which needed to be considered against results this year.

“This does have an impact to average rate but for December it was the above normal trend of an Ashes year that reflects the drop in average rate to prior year.”