Perth hotel vacancy rate rises as mining boom ends

The number of empty hotel rooms in Perth is growing as the strength of the West Australian mining boom continues to subside.

The most recent Tourism WA figures from March reveal 17.6 per cent of hotel rooms in Perth were vacant, the most since 2010.

Occupancy rates were down 3.1 per cent compared to the same time last year.

After surveying nearly 50 hotels in the city, Australian Hotels Association chief executive Bradley Woods is reporting similar results.

He said Perth was now well beyond the chronic shortage of hotel rooms that plagued the city in 2012.

"Going off the peak from say 18 months ago, it has certainly dropped and across the board for three, four and five star hotels, it's down around 10 per cent," he said.

"What we saw as a result of the mining peak in Western Australia was that there was huge demand from the corporate resources sector for accommodation in Perth.

"That drove up accommodation demand and price.

"There was a lot of additional business that came off that, and now we're settling into more of a normal period of a mixture of greater tourism, corporate meetings, conferences and business tourism."

Up to 2,500 new hotel rooms being built

A significant number of major scale hotel developments are in the pipeline for Perth, with an estimated 2,000 to 2,500 new rooms expected to come on the market in the next few years.

Mr Woods said that was good news for the sector, so long as oversupply does not become an issue.

"It's a good thing as long as the State Government does what every other state government is doing around the country, and that is investing more in marketing and promoting WA as a tourist and business leisure destination," he said.

"If the State Government doesn't compete effectively, we will see an unfortunate oversupply of rooms that have been stimulated by Government policy.

"Hopefully in the state budget next week, we'll see an improvement in the state marketing dollars of tourism."

Commercial real estate agency Collier International director Ian Mickle was optimistic about the future of Perth's hotel sector.

"Overall, hotel occupancy levels are remaining reasonably static at this point, despite the slowdown of some sectors in the economy," he said.

"There is a significant amount of supply in the pipeline which will obviously help to improve the quality of hotel stock in Perth, which is important for attracting additional tourism.

"The existing stock will come under pressure as a result of that and a number of owners of hotels will have to look to refurb to remain competitive in the market."

Mr Mickle said he was not worried about an oversupply.

"Domestic travel into Western Australia is up 20 per cent, so that is taking up some of the slack," he said.

"Overseas visitation is up as well, mainly from China, we've had significant growth from that sector."

Source: ABC News   Glan De Poloni May 8th 2015