Perth hotel market checking in for 4000 new rooms

More than 4000 new hotel rooms are on the drawing board in Perth, and another 700 in Fremantle, as developers tip more than $3 billion into the western cities in the next five years.

Property industry experts say it’s commercial travellers who are driving the hotel sector, with the resource sector in particular pushing up occupancy rates.

Colliers International Director Wayne Lawrence says hotels are traditionally busy from Monday to Friday, but occupancy drops at the weekend.

“Tourism has been a less active component for the Perth market, but the advent of more direct flights from China should see this sector grow going forward,” he says.

Lawrence says one of the challenges for Perth’s hotel sector has been the amount of old stock.

“However, things are changing – some quality refurbishments and the addition of high-end boutique hotels such as The Terrace Hotel in the CBD and larger scale establishments such as the Crown complex at Burswood have breathed new life into the sector,” he says.

“High construction costs have largely kept the lid on new supply in Perth, but there is a construction cycle looming which could deliver a significant number of new rooms.”

The Australian Hotels Association has counted up projects either under substantial development or already under construction.

Projects on the cards include the $500 million, 500-room Crown Towers at Burswood, the 120-room hotel included in the $350 million Old Emu Brewery site project and the five-star, 250-room hotel in the Elizabeth Quay project on the Perth foreshore.

While not all of the rooms are likely to be built, the WA Government believes at least 1900 are needed so Perth can keep up with demand and avoid a shortfall.

AHA Chief Executive Officer Bradley Woods says Perth will lead Australia in the establishment of new hotels.

“Investment will come from both Australian and international developers that will secure hotel management companies with experience and footprints across the globe, including home grown WA expertise,” he says.

“In addition to the developments in Perth and Fremantle, consideration is also underway for new hotels in outer metropolitan areas such as Murdoch University and Perth Airport.”

Lawrence says most Perth hotel rooms sit in the Adelaide Terrace strip, a long way from the main CBD and entertainment precincts.

“The release of land by the State Government in Elizabeth Quay, the FESA site and the City Link project provide huge opportunities for quality new hotel product that is well located, and would help to address Perth’s well-documented room shortage,” he says.