Why is Australia building more hotel rooms?

Angus Kidman 5 December 2016

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We already have 33,000 of them empty most nights.

If you plan to build a hotel in Australia, you'll need to assume that one-third of your rooms will be empty most of the time.

The chart below shows the room occupancy rate for tourist accommodation with 15 or more rooms available over time, using Australian Bureau of Statistics (ABS) data. What you can see is that while there are very some dips and we've seen a general improvement in occupancy levels since 1998, the figure of two-thirds stays remarkably consistent in recent years.

Obviously, there are points when you can expect 100% occupancy. I grew up in a university town, and you could guarantee that there wouldn't be a room available on graduation weekends. But the law of averages also means that there will be dates when hotel occupancy will be well below that 66%.

Despite this apparent surfeit of availability, the number of rooms available in Australia is set to expand. ETB Travel news reports that there are currently more than 100,000 hotel rooms available in Australia. Remember, that means something like 33,000 vacant on a typical night. Yet despite that, we're going to see 4,000 rooms added in 2017, and another 5,000 in 2018. There are more than 120 hotel projects in the offing, most of them decidedly upmarket.

Is that good news for travellers? It depends. If you're aiming for 5-star accommodation, you'll certainly have more choices. But if you're bargain-minded, chances are you'll be turning to Airbnb, or trying to book far enough in advance to score a cheap room. While it's true that sometimes you'll get a high-class room for a bargain price if you wait until the last minute, there's always the risk that you'll end up with nowhere to sleep at all.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

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