Sydney - 1 August 2001 - Queensland hotel markets - Brisbane, Cairns and the Gold Coast - show the most improved room yield results for the first six months of 2001 according to the Andersen Hotel Industry Benchmark Survey released today.  The survey, which compares occupancy, average room rate and room yield performance for Australian Capital City markets illustrates a very different picture to the first six months of 2000.  

Sydney, Perth, Regional NSW and Adelaide hotel markets show weakening room yield performance relative to 2000, with the largest declines in room yields recorded for Sydney.

Commenting on the survey results, Rutger Smits, Director of Hospitality & Leisure Services Australia said �Results to June 2001 reinforce a message we delivered to the industry in December, that defining competitive advantage would be critical in maintaining room yield.  Whilst some operators continue to outperform the general trend through positioning and innovative marketing approaches, 2001 Benchmark Survey results highlight the effect of supply additions, the current economic climate, a tighter domestic corporate market and waning inbound growth�.

Brisbane continues to benefit from its strong events-based calendar, buoyant convention business and the competitive airfares linking the capital with Sydney and Melbourne.  Demand for the Gold Coast was particularly strong in the month of June 2001, with a 9 percent rise in occupancy driven in part by discounted room rates and by the touring British Lions supporters, who extended an influence to �the Coast� - well beyond the Brisbane football venue.  Cairns has been well supported by meetings and conference demand during the first two quarters of 2001 and renewed Asian visitation to the city, driving year-to-date room yields seven percent higher than the corresponding period in 2000.  

For the six months to June 2001, Sydney Central hotels recorded a decline in room yield of 10 percent relative to the corresponding period in 2000. Growth in supply at the 4&5-star end of the market has impacted existing deluxe and superior hotels in Sydney, with the effects of discounting also felt at the 3-star level, as consumer price sensitivities affect their choice of property.  The additional strain on corporate demand as a result of economic uncertainties during 2001 and the softening in inbound growth rates have compounded the effects of additional supply across Sydney.  

The Perth market continues to grapple with declining room rates, the result of strong price competition and discounting.  Long-haul domestic corporate demand has softened during the first six months of the year.  The flow on effects of GST and the airfare price war on the East Coast have been cited as key influences in the decline in demand, which saw occupancies fall by four percent in the six months to June 2001 and room yields decline by 6 percent relative to 2000.

Adelaide operators, having passed through some difficult trading conditions during the initial winter months are optimistic that renewed corporate demand and a stronger events calendar in Spring will boost third and fourth quarter performance. Year-to-date room yields fell by 3 percent, driven by rate discounting.

Melbourne continues to perform steadily relative to other Australian markets, with a 1 percent decline in room yield influenced by softer occupancies.  The corporate market in Melbourne remains tight.  A more pronounced fall in occupancies during the month of June 2001 is expected to be contrary to July performance with the positive influence of the British Lions supporters.   

Canberra�s year to date results indicate room yield performance on par with the first six months of 2000.  The increasingly competitive influence exerted by serviced apartments and improved penetration by new properties will continue to shape this market�s overall performance.  

Hobart�s declining occupancies in May and June 2001 have countered a strong start to the year for the capital city, resulting in no change to room yield performance relative to 2000.  The lack of conference activity and reduced demand from inbound and leisure travelers over the winter are cited as key influences in Hobart�s softening room yields in the last two months.

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