THE growth in Australian hotel room numbers is likely to proceed at a snail’s pace with high land costs locking developers out of the accommodation sector. Jones Lang LaSalle estimates new room supply will increase at just 1.4% per annum in major markets to 2010.

CEO Asia Pacific David Gibson hotel development economics are likely to remain “challenging” unless room rates increase faster than development costs, which appears unlikely in the short-term.

At present, the Gold Coast (300 rooms), Darwin (340 rooms), Sydney (300 rooms) and Melbourne (200 rooms) are the most active markets. Looking ahead, the strongest developer interest is in Melbourne, Brisbane and Sydney, where a total of 2000 rooms are proposed over the next few years.
May 1, 2007

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