Australia-China relations: will the hotel boom go bust as Chinese tourists give Down Under a skip in post-Covid travelling?

Investment in Australian hotels more than quadrupled in the first half of the year, a reflection of confidence in robust local demand

But for sustainable growth, foreign tourists are essential and that makes Canberra’s spat with Beijing a potential problem, analysts say

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Investment in Australian hotels more than quadrupled in the first half of the year, according to property consultancy JLL. Photo: Shutterstock Images

Published: 8:30am, 27 Jul 2021Updated: 7:38pm, 27 Jul 2021

Investment in Australian hotels more than quadrupled in the first half of the year, according to property consultancy JLL, a reflection of confidence in robust local demand for travel that is likely to boost one of Covid-19’s worst-hit industries.

But for the hotel segment to sustain growth, international travellers including mainland Chinese are still crucial to the market, analysts said.

And that might just spoil an otherwise bright outlook for Australia’s hotel property segment, because Chinese tourists may have found reasons beyond border closures to give the country a miss.

In the first six months of 2021, the volume of deals involving hotel properties in Australia more than quadrupled to US$215 million, according to a JLL report. The hefty increase was driven largely by the sale of AccorInvest’s portfolio of 17 hotels in cities such as Sydney, Melbourne and Canberra for US$134 million, said JLL.

“The majority of demand for hotel accommodation in all major markets with the possible exception of Far North Queensland is domestic,” said Max Cooper, director, hotels, Savills Australia and New Zealand.

“However international travel is and likely will remain a very important element for Australian tourism. Likely there will be some shift in international travel patterns over the short to medium terms. Investors consider there will be a full recovery but the timing of that recovery will somewhat depend on the market.”

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