Resortbrokers Managing Director Trudy Crooks, and Broker Kelli Crouch, unpack the hotel real estate landscape in Queensland and the Northern Territory.
Going into FY25, ResortBrokers’ market outlook for Queensland is as strong as ever: it remains one of the best places in Australia to buy an accommodation property or business.
Inflation, cash rate uncertainty and the housing crisis haven’t changed the fundamental drivers of one of strongest tourism markets in the country. Tourism Research Australia (TRA) data shows Queensland is second only to NSW by consumption and has enjoyed one of the strongest post-Covid rebounds in the country.
The state has seen resurgent tourist spending, particularly from international visitors, outpacing the national average and eclipsing pre-Covid levels. Occupancy, RevPAR and ADR are all up on FY23 according to the latest TRA figures for Queensland. This is across the board on a regional level.
Despite higher borrowing costs due to cash rate increases, demand for accommodation properties and businesses remains robust. In FY24, ResortBrokers settled some of our largest ever deals for hotels operating under a management rights structure.
Our sale of the management rights to the 110-unit luxury hotel Burleigh Mediterranean Resort to Ultiqa Hotels and Resorts was one of the largest ever of a Gold Coast management rights business and one of the largest that was not purchased off the plan.
The Edge Apartment Hotel and Empire Apartment Hotel, two neighbouring Rockhampton hotels totalling 213 rooms, sold in one line, and was the largest ever management rights transaction for a regional location anywhere in Australia.
Queensland’s regions are increasingly attracting interest from non-local buyers. Despite North Queensland’s accommodation industry having an underwhelming tourist season due to cyclones and floods, its medium- to long-term outlook remains resilient because of the region’s imperishable natural attractions.
Regional Queensland accommodation businesses continue to offer higher returns, not only against South East Queensland but also non-accommodation asset classes with freehold passives transacting at yields between 7.5% to 8.5%, compared to lower yields in the office, retail and industrial sectors.
NT Outlook, Kellie Crouch
I was last in the Top End – Darwin, Katherine and Lichfield — in May. My feeling talking to operators on the ground then was they’re expecting a stronger year of trade to make up for an ordinary 2023.
While accommodation businesses in the rest of the country traded well in 2023, the Territory was a bit softer.
To boost tourist trade this year, the Territory Government has launched several initiatives to boost visitation. There are some incredible cashflow businesses through the centre of the country. Same for Darwin, which is the epicentre of the Territory’s hotel activity.
If you’re a buyer chasing exceptional returns, the Territory is definitely worth considering.