Australia’s accommodation sector is buoyant, thanks to an uptick in numbers of Asian tourists, the popularity of serviced apartments, and a relatively weak dollar making the country a popular tourist destination.
That’s the conclusion of the Industry Overview Report on the accommodation industry, published by Bankwest as part of its Business Insights series.
The report found that, of the five sub industry classes (hotels and resorts, motels, serviced apartments, caravan parks and camping grounds and holiday houses, flats and hostels), the serviced apartments industry is set to grow the fastest over the next five years through FY2020-21, averaging growth of 3.0% per annum.
Bankwest Executive General Manager, Business Banking, Sinead Taylor, said the report identified important drivers behind the industry’s successes.
“It’s pleasing to see the relative health of the accommodation industry, especially when we’re able to see what’s driving that success,” she said.
“Two key influential factors are the relatively weak Australian dollar, coupled with the digitisation of the industry, leading to a huge variety of online booking websites; together these elements have created a significant boost for the international tourism industry,” she said.
The hotels and resorts sub industry group is also expecting relatively high revenue growth of 10.3% over the next five years, taking revenue from AUD$7.7 billion to AUD$8.6 billion.
Despite New Zealanders still being the most common visitors to our shores (1,203,000 in 2016), increasing economic prosperity in China and India saw an increase in the number of visitors for the 12 months to June 2016 by 22.6% and 9.7% respectively.
Likewise, the growth in digital accommodation services is creating a more discerning consumer, including increased ‘savviness’ around price and location.
“Accommodation comparison sites like Trivago and Hotels.com allow those hunting for accommodation to compare costs at the click of a button, while online accommodation sharing services like Airbnb challenge traditional sectors, especially in the motels and holiday houses, flats and hostels sectors,” said Taylor.
The accommodation industry is a significant contributor to the Australian economy, providing employment for more than 116,000 Australians and generating in excess of $17 billion in revenue annually. Geographically, the largest number of employees and businesses are based in NSW, followed by Queensland.
The ACT has been a growth leader in the accommodation industry, growing by 22.6% in the 12 month period to May 2016. Western Australia and the Northern Territory also showed strong growth over this period (11.6% and 9.7% respectively). Queensland and Tasmania experienced slight contractions in the number of accommodation jobs by 4.9% and 3.3% respectively during this period.
Taylor said the report had been produced as part of Bankwest’s ongoing commitment to offer insights on economic data, trends and issues of value to its customers, businesses, communities and policy makers.
“Bankwest is committed to helping customers and local businesses achieve what matters, contributing to the development of our communities and being a positive voice in the debate on the future of the economy.
“These reports are designed to help businesses understand the factors impacting their industry, and how other businesses are performing,” she said.
Facts – at a glance:
- Industry Revenue (2014-2015) $17 billion
- Number of Accommodation Employees (2014-2015) 116,000
- Number of Accommodation Businesses (June 2014) 8,917
- Wages (2014-2015) $3.97 billion
- Proportion of Accommodation businesses that exited market in FY2014-15 15.7%
- Proportion of businesses with more than $2million in turnover (June 2015) 11.5%
- Employment in the accommodation industry subdivision has fallen by 7.2% between FY2013-14 and FY2014-15 to 116,000.
- By state, the largest proportion of the workforce is in NSW, where 38,300 workers are based. This is followed by Victoria (29,100), Queensland (23,100) and Western Australia (12,800).