Mining downturn hits hotel returns
by Leon Gettler
The slowdown in the mining sector has taken a big chunk out of the takings of some hotels in mining states.
Bookings tracked on Hotels.com show that the price of a night in Darwin plummeted by as much as 20 per cent last year, tumbling from $200 a night in 2014 to $157 a night last year.
According to leading hotel market researchers STR, there was a 7.8 per cent fall in Darwin hotel occupancy to 67.4 per cent while room rates contracted 7.9 per cent to $171 a night last year.
There was also slippage in the returns of hotels in Perth and Brisbane.
Darwin suffered the largest fall in revenue for any capital market in Australia at 15.2 per cent. The next worse was Brisbane at 10.9 per cent,
Putting it simply, less mining activity means fewer people are coming in which hurts hotels.
But the overall picture is patchy. Other parts of the industry are cleaning up.
The domestic and overseas tourism boom has seen room rates in Port Douglas in far north Queensland soaring12 per cent to $200 a night. Room rates have surged 7 per cent to $310 a night in Uluru and 4 per cent in both Cairns and the Gold Coast.
And capital cities, apart from Darwin, Brisbane and Perth, did well too. Sydney room rates rose 6 per cent to $217 a night and in Melbourne, they were up 4 per cent to $182 a night. Newcastle did well too with room rates there rising 11 per cent to $183 a night.
A weaker Australian dollar and major sporting events such as the Cricket World Cup saw hotel prices rising 2 per cent nationally to $183 a night.
That put Australia ahead of the 1 per cent rise recorded globally by Hotels.com.
11th March 2016
