Gold Coast hotel market looking up ahead of Commonwealth Games
Tom Gibson, senior broker CBRE Hotels, Brisbane
The Gold Coast hotel market in Queensland has endured tough times in recent years. But there is some light at the end of the tunnel and considerable talk about the likely impact hosting the 2018 Commonwealth Games will have on one of Australia’s best known holiday destinations.
There is no doubt that the Gold Coast hotel market is currently riding the same turbulent wave as the entire Queensland tourism industry as a result of global economic uncertainty and a high Australian dollar.
However, unlike the majority of other tourism-reliant destinations, such as Far North Queensland and the Whitsundays, the Gold Coast will prove to be more resilient in its recovery. Not only is it a more accessible destination with its own International Airport, there is a wider spread of accommodation stock, from three star motels to new five star hotels.
The Sheraton Mirage and the Marriott Gold Coast have both recently invested A$20 million (HK$162 million) in refurbishments and, with the recent opening of the new Hilton Hotel in Surfers Paradise and Peppers in Broadbeach, the industry continues to provide a backbone for the local and Queensland economy.
This provides more confidence for the region for the short term, though the big question still remains – how many years will it take until the Gold Coast hotel market really starts to pick up?
I think in order to see a genuine growth in the accommodation sector we would need more certainty out of other global markets and for the Australian dollar to fall back towards 85 cents against the US dollar. Furthermore, some stock needs to be repositioned by counter cyclical investors to attract clientele with a higher average spend to put another cog in motion for recovery. If you look at other high-end exclusive resorts in Queensland, such as Qualia on Hamilton Island and Spicer’s Hidden Vale behind Brisbane, these properties that can offer exclusivity and a luxurious experience and drive the success of surrounding regions.
Another positive for the market has been the successful bid for the Gold Coast to host the 2018 Commonwealth Games. This will bring an enormous surplus of new infrastructure to the region. However, as evidenced by other cities that have previously hosted the games, such as Manchester, Melbourne and Delhi, the years between winning the rights to host the games and the actual year of the event, prove to have little impact on the local market. They instead provide more of a long-term boost in confidence to the market and local businesses. It’s the investments in tourism infrastructures leading up to the games, such as resorts and golf courses, which really dictate the growth of a region and accordingly will put the Gold Coast in the right direction in time for the Commonwealth Games.
What we will see as a result of hosting the games is an influx of tourists for approximately one month either side of the games to major tourist destinations in Australia. During the actual days of the games, the Gold Coast and feeder regions to the area, such as Brisbane, will be running at almost maximum capacity filled by athletes, associated staff, media, families and supporters. It is a real opportunity to showcase not only the Gold Coast, but the rest of Australia.