Welcome to the latest Savills Hotels Annual Report
While hotels in Sydney and Melbourne are experiencing unprecedented trading performance, there was a relative dearth of sales activity in 2017 with national transaction values down 35% compared to the 2016 calendar year.
Since the peak of transaction sales set in CY 2015, there has been a precipitous decline in the total dollar value of hotels transacted across Australia. Many owners seem to be opting to hold their hotels for fear of being cashed up without the ability to re-enter the market; which is becoming a self-fulfilling prophecy.
In 2018, we anticipate that Sydney and Melbourne markets will continue their strong trading performance given record international and domestic tourist numbers and visitor spend, and relatively muted supply growth.
We see counter cyclical opportunities in 2018 in Brisbane, which we consider has bottomed and will benefit from the Commonwealth Games and activities associated with the Queens Wharf development, as well as a number of other significant public infrastructure projects and large scale private developments. Perth has additional new supply still to enter the market, which in the short term will lead to downward pressure on KPI's, giving rise to counter-cyclicial buying opportunities for well capitalised investors who can see the positive story going forward.
For the full story, analysis and outlook, along with opportunities that the 2018 market will bring, download the Savills Hotels Market Report 2018 which provides a review of CY 2017.