Report says Cairns hotel industry will rebound

A NEW economic report forecasts a strong future for the Far North's hotel industry with steady improvements in occupancy rates and room prices after being in the doldrums for the past four years.

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The outlook, by leading economic advisory firm Deloitte Access Economics, says the improvements in occupancy rates and room prices indicate "a strong performance for one of Australia's most significant tourism regions" by June 2015.

There are at least 5328 hotel and resort beds, not including apartments or motels, in the region with the current average occupancy of 58.8 per cent predicted to rise to 66 per cent in three years and the average room rate rising from $117 to $131.

The report says occupancy rates are continuing to recover from the decline in Japan and natural disasters.

"Among other positive signs, the decision of China Eastern to commence flights to Cairns will have a positive impact on visitation and hence hotel market performance in the region," the report says.

"However, while occupancy rates have rebounded, they remain well off the levels experienced prior to 2008 and it is likely to take some time before they return to their pre-global financial crisis heights."

The report says by June 2015 occupancy rates are forecast to reach 66 per cent but warns that it will be "heavily reliant on" increases in international visitors.

Melbourne friends Malorie Raymakers, Mikaela Prentice and Emily Arnott are domestic travellers contributing to the region's economy.

"We've come for Schoolies because we decided the party scene on the Gold Coast wasn't really for us," Miss Arnott, 17, said.

It has been a strong holiday season for the region, boosted by the solar eclipse two weeks ago and the arrival of the first direct flights from China.

Queensland Hotels Association Far North accommodation division chairman Peter Blackburn said the signs were pointing to a better future but warned there were still some drawbacks.

"UK, Europe and US will continue to be restrained by their weak economies and the group market from Japan is restricted by air access," he said.

"China will continue to grow as long as direct flights are maintained after the end of the trial period." Hilton Cairns general manager John Lucas said the five-star segment was doing the best.

"These numbers reflect the overall accommodation sector, however, the five-star market is showing greater strength," he said.

Herron Todd White research director Rick Carr said the report was "encouraging".

Mr Carr said, despite the high Australian dollar, Australians were returning to the Far North to holiday.

Article printed by The Cairns Post - Thursday, November 29, 2012

Peter Musso licensed real estate agent at Ray White Smithfield selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica, Kamerunga and surrounds.