Melbourne, Australia (PRWEB) July 26, 2014
The Hotels and Resorts industry has emerged from the troubled years of the global financial crisis, during which revenue stagnated due to weakened demand from both the corporate and tourist segments. IBISWorld industry analyst Ryan Lin states, “Hotels and resorts have faced heavy competition from other forms of accommodation, particularly serviced apartments, which have been refined to cater for the lucrative corporate segment.” Industry revenue declined by 8.3% and 3.2% in 2008-09 and 2009-10 respectively, as the global financial crisis wreaked havoc on consumer sentiment and business confidence. However, the industry has rebounded following a resurgence of inbound tourist numbers and a recovery in consumer and business confidence. For this reason, industry revenue is expected to grow by an annualised 4.0% over the five years through 2014-15, to total $6.3 billion.
Despite the difficult operating environment post-financial crisis, the industry has returned to growth, with revenue recovering strongly over the past four years. Many hotel and resort operators reacted to the adverse economic conditions by cutting room rates and offering additional perks and services as part of packaged deals. While average takings per room remain low by historic standards, the industry's occupancy rate across capital cities remains high. On the back of the high occupancy rate (particularly in city markets), revenue is forecast to increase by 3.0% in 2014-15. Domestic tourism has been weak over the past five years, as Australians have taken advantage of cheap flights to Asia and a favourable exchange rate. According to Lin, “Australians are anticipated to spend less on domestic holidays in 2014-15 than they did 10 years prior, but this is expected to change as the Australian dollar falls in value.” Much of the inbound tourism slack has been picked up by international arrivals, especially from Asian countries like China. This has been the main contributor to the industry's growth over the past decade. The Hotels and Resorts industry is well positioned to take advantage of the tourism market's shift towards more Asian travellers.
The Hotels and Resorts industry exhibits low levels of market share concentration. The industry structure varies substantially between owner-operators and operators on lease. The number of leasing and management agreements in the industry has increased as major operators prefer not to own hotel property but rather to concentrate on hotel management. This is likely to remain the preferred model of business operation over the next five years. Despite this, many independent hotel and resort owners exist, especially outside the lucrative capital city-centre markets, where concentration tends to be lower. Over the past 10 years many independent hotel operators have been snapped up by one of the main hotel operators, testament to the low growth in enterprise numbers. In industry’s largest operator is Accor Asia Pacific.
For more information, visit IBISWorld’s Hotels and Resorts report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry includes hotels and resorts that have more than 15 rooms. Hotels and resorts are establishments that are licensed to operate a public bar and provide accommodation on a room or suite basis, with a bath or shower and other facilities in most guest rooms. Cooking facilities, such as hot plates and a microwave, are not available in most guest rooms, although tea and coffee-making facilities are usually included.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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