Inbound travellers are likely to trade up to motels and serviced apartments instead of using holiday houses, flats or hostels.
Melbourne, Australia (PRWEB) November 11, 2014
Demand for accommodation offered by operators in the highly fragmented Holiday Houses, Flats and Hostels industry in Australia has been mixed over the past five years. The industry consists of three main service segments: backpacker accommodation, bed and breakfast accommodation, and short-term house and apartment rentals. While backpacker and bed and breakfast accommodation have both been affected by weak domestic and international tourism demand, demand for rented houses and apartments has been strong. According to IBISWorld industry analyst Ryan Lin, “the house and apartment rental segment, which includes privately owned houses and apartments that are rented out on short-term bases, has benefited from inbound tourists looking for cheaper travel options, especially due to the economic woes of Europe and the US.” IBISWorld expects the industry to generate revenue of $1.0 billion in 2014-15, up 0.5% on 2013-14.
The industry was negatively affected during the global financial crisis, when demand from inbound key market slowed, although to a lesser extent than other accommodation industries. Industry revenue growth has since recovered marginally. “Over much of the past five years, the high Australian dollar made long trips to Australia from the Northern Hemisphere uneconomical for many travellers,” says Lin. However, inbound travel has grown as the Australian dollar has depreciated since 2013-14. As a result, industry revenue is expected to grow at an annualised 0.9% over the five years through 2014-15. The industry exhibits low levels of market share concentration.
The outlook for the next five years does not bode well for the Holiday Houses, Flats and Hostels industry. The domestic tourism market is expected to remain relatively weak compared with international tourism, with lucrative inbound tourists preferring higher quality forms of accommodation. With the dollar expected to ease and remain below parity over the coming years, inbound travellers are likely to trade up to motels and serviced apartments. Much of the industry's growth will depend on the ability of individual business owners to successfully market their services to holiday-makers, particularly via the internet, which has become the main platform for small accommodation providers to advertise through.
For more information, visit IBISWorld’s Holiday Houses, Flats and Hostels industry in Australia report page.
Enterprises in this industry operate rented houses and apartments, bed and breakfast accommodation and backpacker hostels and other accommodation for short-term rental. The industry excludes hotels, resorts, serviced apartments, motels, caravan parks and camping grounds.
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