MARKETVIEW Australia Hotels, Q4 2019 Brisbane and Perth showing positive signs
73.9% $186 $137 8.7 million 5.0%
*Arrows indicate change from previous year.
Key Points BRISBANE AND PERTH ABSORBING SUPPLY
▪ Annual RevPAR declined 1.9% to $137 for the year ending December 2019
▪ National occupancy declined 0.9% to 73.9%
▪ ADR declined 1.0% to $186 for the year ending December 2019
▪ Hobart, Brisbane and Adelaide all registered positive annual RevPAR growth for the year ending December 2019
▪ International visitor arrivals reached a record high of 8.7m for the year ending September 2019, an increase of 2.5% on 2018
▪ Spending by domestic visitors in the year to September 2019 was $79.1bn, up 13.3% on 2018, whilst overnight spend by international visitors was $31.3bn, up 5.0% on 2018
▪ Hot el sales volume for 2019 was ~$1.8bn
Chart 1: Room Supply vs. Room Demand Growth – Brisbane & Perth 15% 20%
15% 10% 10% 5%
5% Movingannual change (%) Movingannual change (%) 0% 0% Dec-17 Dec-18 Dec-19 Dec-17 Dec-18 Dec-19 Brisbane room nights available (supply) Perth room nights available (supply) Brisbane room nights occupied (demand) Perth room nights occupied (demand) Source: STR; CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 1 MARKETVIEW AUSTRALIA HOTELS National Overview *Rolling annual December-19
Adelaide Brisbane Occupancy 80.4% 1.9% Occupancy 72.0% 1.4%
ADR $156 -0.1% ADR $157 1.4%
RevPAR $125 1.8% RevPAR $113 2.8%
Cairns Canberra Occupancy 77.4% -3.8% Occupancy 76.4% -2.9%
ADR $148 -2.8% ADR $171 -2.8%
RevPAR $115 -6.5% RevPAR $130 -5.6%
Darwin Gold Coast Occupancy 55.9% -14.7% Occupancy 69.5% -3.3%
ADR $146 -0.2% ADR $197 -2.6%
RevPAR $82 -14.9% RevPAR $137 -5.8%
Hobart Melbourne Occupancy 83.1% 4.7% Occupancy 80.3% -2.0%
ADR $184 3.0% ADR $186 0.1%
RevPAR $153 7.9% RevPAR $149 -1.9%
Perth Sydney Occupancy 73.2% 0.1% Occupancy 82.5% -1.9%
ADR $164 -1.0% ADR $220 -3.0%
RevPAR $120 -0.8% RevPAR $182 -4.8%
Source: STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 2 MARKETVIEW AUSTRALIA HOTELS
DOMESTIC PURCHASERS ACTIVE Chart 3:Hotel Sales above $5 million
$4,000 70 $3,500 60 $3,000 50 $2,500 40 $2,000 30 Millions$ $1,500 $1,000 20 $500 10 $0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Domestic Offshore Number of Transactions (RHS) Source: RCA, CBRE Research Table 1: Notable Transactions Q4 2019 STRONG SUPPLY PIPELINE HOTEL LOCATION SALE DATE PRICE (m) KEYS Vibe Sydney Sydney Dec-19 $108 150 Sebel Canberra Canberra Dec-19 $48 144 Source: RCA, CBRE Research
Chart 2: National Supply Pipeline – opening before December 2024
12,000 45% 10,000 8,000 25% 6,000
4,000 32% 40% 22% NumberofKeys 2,000 8% 6% 56% 4% 4% - -2,000 Adelaide Brisbane City Cairns Canberra Darwin Gold Coast Hobart Melbourne City Perth City Sydney City
Proposed DA Applied DA Approved Under Construction Recently Opened Withdrawn
Source: Cordell, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 3 MARKETVIEW AUSTRALIA HOTELS
Adelaide 80.4% $156 $125
STRONG FINISH TO THE YEAR Chart 5: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual)
6,000
4,000
2,000 Visitor Visitor nights(000s)
0
Sep-2012 Sep-2013 Sep-2014 Sep-2015 Sep-2016 Sep-2017 Sep-2018 Sep-2019 International Domestic Total Source: TRA, CBRE Research Q4 2019 INCREASE IN HOTEL NIGHTS Table 2: 2020 Supply Pipeline • Property Development Quality Number of Current Opening Type Keys Status Date 4 Under April Crowne Plaza New Build 326 Star Construction 2020 • 5 Under April M Suites Adelaide New Build 91 Star Construction 2020 Adelaide Casino - 6 Under September New Build 123 SKYCITY Star Construction 2020 • Hotel Indigo 4 Under December New Build 137 Adelaide Star Construction 2020 Source: CBRE Research Q4 2019 • SUPPLY TO HIT THE MARKET IN 2020
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• Chart 4: Hotel Performance KPIs Rolling Annual Change
4%
2%
0% % Change % -2%
-4% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 4 MARKETVIEW AUSTRALIA HOTELS
Brisbane 72.0% $157 $113
MARKET SHOWING RECOVERY Chart 7: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual)
10,000
5,000 Visitor Visitor nights(000s)
0
Sep-2016 Sep-2017 Sep-2018 Sep-2019 Sep-2012 Sep-2013 Sep-2014 Sep-2015 International Domestic Total Source: TRA, CBRE Research Q4 2019 INCREASE IN HOTEL NIGHTS
• Table 3: Supply Pipeline Property Development Quality Number of Current Opening Type Keys Status Date 5 Under July Hotel Indigo New Build 146 • Star Construction 2020 Queens Wharf (Ritz Carlton, Dorsett, 5/6 Under January New Build 900 Rosewood, The • Star Construction 2023 Star) Source: CBRE Research Q4 2019
• LIMITED SUPPLY PIPELINE
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• Chart 6: Hotel Performance KPIs Rolling Annual Change
3%
1%
-1% % Change % -3%
-5% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 5 MARKETVIEW AUSTRALIA HOTELS
Cairns 77.4% $148 $115
PERFORMANCE SOFTENING Chart 9: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 4,000
3,000
2,000
Visitor Visitor nights(000s) 1,000
0
Sep-2013 Sep-2016 Sep-2017 Sep-2019 Sep-2012 Sep-2014 Sep-2015 Sep-2018 International Domestic Total
Source: TRA, CBRE Research Q4 2019 DECREASE IN HOTEL NIGHTS
• Table 4: 2020 Supply Pipeline Property Development Quality Number of Current Opening Type Keys Status Date • 5 Recently November Bailey New Build 217 Star Opened 2019 5 Under April Flynn New Build 311 Star Construction 2020 • Source: CBRE Research Q4 2019
• LUXURY HOTELS HAVE OPENED
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Chart 8: Hotel Performance KPIs Rolling Annual Change
6%
3%
0%
% Change % -3%
-6%
-9% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 6 MARKETVIEW AUSTRALIA HOTELS
Canberra 76.4% $171 $130
PERFORMANCE DECLINING Chart 11: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual)
4,000
3,000
2,000
Visitor Visitor nights(000s) 1,000
0
Sep-2014 Sep-2017 Sep-2012 Sep-2013 Sep-2015 Sep-2016 Sep-2018 Sep-2019 International Domestic Total
BUSINESS TRAVEL REMAINS KEY MARKET Source: TRA, CBRE Research Q4 2019
• Table 5: 2020 Supply Pipeline Property Development Type Quality Number Current Opening of Keys Status Date • Mercure 4 Recently February New Build 90 Belconnen Star Opened 2020 Adina Grand 5 Under November New Build 132 Canberra Star Construction 2020 • Source: CBRE Research Q4 2019
NEW STOCK ENTERING THE MARKET •
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Chart 10: Hotel Performance KPIs Rolling Annual Change
6% 4% 2% 0%
% Change % -2% -4% -6% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 7 MARKETVIEW AUSTRALIA HOTELS
Darwin 55.9% $146 $82
OCCUPANCY STILL LOW Chart 13: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 3,000
2,000
1,000 Visitor Visitor nights(000s)
0
DECLINE IN NIGHTS SPENT IN HOTELS
Sep-2013 Sep-2016 Sep-2017 Sep-2019 Sep-2012 Sep-2014 Sep-2015 Sep-2018
• International Domestic Total Source: TRA, CBRE Research Q4 2019
• Table 6: SupplyPipeline
Property Development Type Quality Number of Current Opening Keys Status Date 5 Under June • Westin Darwin New Build 240 Star Construction 2022
Source: CBRE Research Q4 2019 •
LIMITED HOTEL DEVELOPMENT
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Chart 12: Hotel Performance KPIs Rolling Annual Change
5% 0% -5% -10%
% Change % -15% -20% -25% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 8 MARKETVIEW AUSTRALIA HOTELS
Gold Coast 69.5% $197 $137
REVPAR DECLINING Chart 15: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual)
10,000
5,000 Visitor Visitor nights(000s)
0
Sep-2013 Sep-2016 Sep-2017 Sep-2019 Sep-2012 Sep-2014 Sep-2015 Sep-2018 International Domestic Total
Source: TRA, CBRE Research Q4 2019
DECREASE IN HOTEL NIGHTS Table 7: Supply Pipeline
• Property Development Type Quality Number Current Opening of Keys Status Date Signature 5 Under March New Build 254 • Broadbeach Star Construction 2021 Meriton Suites 5 Under September New Build 332 Surfers Paradise Star Construction 2021 Dorsett Hotel 4.5 Under January New Build 316 (The Star) Star Construction 2022 • Source: CBRE Research Q4 2019
LARGE SUPPLY PIPELINE •
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Chart 14: Hotel Performance KPIs Rolling Annual Change
12%
8%
4%
% Change % 0%
-4%
-8% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 9 MARKETVIEW AUSTRALIA HOTELS
Hobart 83.1% $184 $153
TOP PERFORMER Chart 17: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual)
3,000
2,000
1,000 Visitor Visitor nights(000s)
0
Sep-2013 Sep-2015 Sep-2016 Sep-2019 Sep-2012 Sep-2014 Sep-2017 Sep-2018 International Domestic Total Source: TRA, CBRE Research Q4 2019
STRONG HOLIDAY MARKET Table 8: 2020 Supply Pipeline • Property Development Quality Number Current Opening Type of Keys Status Date Crowne Plaza 4 Under April New Build 235 • Hobart Star Construction 2020 Hyatt Centric 5 Under June New Build 221 Hotel Star Construction 2020 5 Under September The Tasman New Build 152 Star Construction 2020 • Vibe Hotel 4 Under December New Build 120 Hobart Star Construction 2020 Source: CBRE Research Q4 2019
• STRONG PIPELINE IN 2020
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Chart 16: Hotel Performance KPIs Rolling Annual Change
9%
6%
3% % Change % 0%
-3% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 10 MARKETVIEW AUSTRALIA HOTELS
Melbourne 80.3% $186 $149
OCCUPANCY DECLINING Chart 19: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual)
20,000
15,000
10,000
Visitor Visitor nights(000s) 5,000
0
Sep-2012 Sep-2014 Sep-2017 Sep-2018 Sep-2013 Sep-2015 Sep-2016 Sep-2019 International Domestic Total INCREASE IN HOTEL NIGHTS Source: TRA, CBRE Research Q4 2019
• Table 9: 2020 Supply Pipeline Property Development Quality Number Current Opening Type of Keys Status Date 4 Under March Vibe Hotel New Build 206 • Star Construction 2020 4 Under March NEXT Hotel New Build 255 Star Construction 2020 5 Under June Hilton Little Queen St New Build 244 • Star Construction 2020 6 Under September W Hotel Melbourne New Build 294 Star Construction 2020 4.5 Under December • Dorsett Melbourne New Build 316 Star Construction 2020 Source: CBRE Research Q4 2019 SUSTAINED SUPPLY INCREASES
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Chart 18: Hotel Performance KPIs Rolling Annual Change
2% 1% 0% -1%
% Change % -2% -3% -4% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 11 MARKETVIEW AUSTRALIA HOTELS
Perth 73.2% $164 $120
PERFORMANCE IMPROVING Chart 21: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual)
6,000
4,000
2,000 Visitor Visitor nights(000s)
0
Sep-2013 Sep-2015 Sep-2016 Sep-2019 Sep-2012 Sep-2014 Sep-2017 Sep-2018 International Domestic Total Source: TRA, CBRE Research Q4 2019 INCREASE IN HOTEL NIGHTS Table 10: 2020 Supply Pipeline • Property Development Quality Number Current Opening Type of Keys Status Date 6 Recently November Ritz Carlton Perth New Build 205 Star Opened 2019 • Park Regis 4.5 Under March New Build 217 Subiaco Star Construction 2020 DoubleTree by 4 Under June Hilton, Perth New Build 229 Star Construction 2020 • Waterfront Source: CBRE Research Q4 2019 HIGH QUALITY STOCK NOW OPEN •
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• Chart 20: Hotel Performance KPIs Rolling Annual Change
0%
-2%
% Change % -4%
-6% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 12 MARKETVIEW AUSTRALIA HOTELS
Sydney 82.5% $220 $182
PERFORMANCE SLOWING Chart 23: Visitor Nights in Hotels, Motels & Serviced Apartments (rolling annual) 30,000
20,000
10,000 Visitor Visitor nights(000s)
0
Sep-2013 Sep-2015 Sep-2016 Sep-2019 Sep-2012 Sep-2014 Sep-2017 Sep-2018 International Domestic Total
Source: TRA, CBRE Research Q4 2019 Table 11: 2020 Supply Pipeline GROWTH IN HOTEL NIGHTS Property Development Quality Number Current Opening • Type of Keys Status Date Vibe Darling 4 Recently December New Build 145 Harbour Star Opened 2019 Adina Apartment 4.5 Under June • New Build 194 Hotel Sydney Star Construction 2020 Crown Plaza 4 Under June New Build 152 Sydney Harbour Star Construction 2020 Source: CBRE Research Q4 2019 • NEW SUPPLY TO COME UNDER PRESSURE
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Chart 22: Hotel Performance KPIs Rolling Annual Change
0%
-1%
-2%
% Change % -3%
-4%
-5% Dec-18 Dec-19 Occupancy Change ADR Change RevPAR Change S Source STR, CBRE Research Q4 2019
Q 4 2 0 1 9 CBRE Research © 2019 CBRE, Inc. | 13 MARKETVIEW AUSTRALIA HOTELS
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