Motel operators will need to differentiate themselves from other providers over the next five years.
Melbourne, Australia (PRWEB) January 16, 2015
Operators in the Motels industry in Australia have struggled to lift themselves out of the poor conditions caused by the global financial crisis. With a slow start to the domestic tourism market and weak interest in motels over much of the past five years. Price-based competition between operators has increased as they seek to attract greater numbers of budget-conscious travellers. According to IBISWorld industry analyst Ryan Lin, “competition from other forms of accommodation, such as hotels, serviced apartments and quality cabins in caravan and holiday parks, has also hurt the Motels industry's bottom line.” However, the industry is expected to benefit from the recovery in the global economy and the falling Australian dollar. For these reasons, industry revenue is expected to grow at an annualised 1.6% over the five years through 2014-15.
Revenue will grow by an estimated 2.7% in 2014-15, to $2.5 billion. This growth is expected to be due to a weaker Australian dollar, which is likely to benefit domestic tourism and assist domestic spending. Recovery of UK and US markets will also assist growth, as will a small revival in both domestic and international business travel. Australians are expected to spend only slightly more on domestic holidays in 2014-15 than they did 10 years ago. “Industry performance is also linked to international visitor arrivals,” says Lin. The number of international travellers arriving from countries outside of Asia, which contributes the most to the industry's revenue, has been mostly stagnant over the past five years, as the Australian dollar has remained high. The industry displays a low level of market share concentration.
Over the next five years, one of the biggest challenges for motel operators will be how to position themselves within the broader accommodation sector and differentiate themselves from other providers. The Motels industry faces competition from both above (from hotels and serviced apartments) and below (from backpacker hostels and caravan park cabins), and is increasingly competing on price alone. The more savvy operators in the industry have already begun to redefine their brands to attract budget-conscious travellers and tourists.
For more information, visit IBISWorld’s Motels industry in Australia report page.
This industry is made up of motels, private hotels and guesthouse businesses with 15 or more rooms. These establishments provide accommodation on a room or suite basis and some may operate a restaurant and bar on the property. Most motels have direct access to an open parking area and are located adjacent to a major road. Most guest rooms have bath and shower facilities and may or may not have cooking facilities, such as hot plates, ovens and microwaves.
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