2 reasons to invest in the hotel market on the Gold Coast

By Greg Bell

There are few better indicators of a region's international attraction than tourist numbers, and the visitor spike on the Gold Coast in recent years has highlighted the area as a market leader.

With tourists coming in, there will be a need to find accommodation, and often hotels are the first port of call. With that in mind, it might just be a great financial move to buy commercial property on the Gold Coast.

Here are two reasons why hotels will be a great addition to any property portfolio:

1) The Australian economy is poised for further growth

On a national level, the position of the economy has strengthened to a highly stable level, and that makes visiting Australia a more attractive prospect. The past year in particular has given a strong account of the hotel and tourism sector.

"With international visitors continuing to be drawn to Australia in record numbers, and domestic visitor nights growing at their fastest pace in two decades, the Australian hotel sector has had another very positive year," stated Deloitte Access economics partner Lachlan Smirl.

"With the outlook for travel and tourism strengthening, Australia's hotel market is poised to push further into unchartered but positive territory. With sharp falls in oil prices fanning the impacts of a weaker Australian dollar, improved growth prospects for both domestic travel and international tourism will shape hotel performance over the coming months."

Projections for improvement in tourist numbers will help to provide the impetus for a stronger market. Tourism Satellite Accounts (TSA) and Tourism and Events Queensland found that in 2013-14, the gross value added (GVA) to the Gold Coast by international visitors alone totaled $510million. In fact, the combined GVA from all tourism in the region was astronomical, standing at $27.4billion.

A media release from the Gold Coast Tourism Corporation (GCT) stated that in the 12 months prior to March 2015, 856,000 international visitors graced the south-east of the Sunshine State, the highest number over the past ten years.

"With a number of new international services to the Gold Coast and Brisbane commencing before year-end, growth in international visitor arrivals is likely to continue for the Gold Coast well into 2015," said Martin Winter, the GCT CEO.

"Qantas' decision to fly daily between Tokyo and Brisbane from August 2015 will provide 210,000 seats a year from Japan and is expected to reinvigorate what has been one of the most important inbound markets for the Gold Coast."

2) Gold Coast shooting for the stars

The Gold Coast is setting itself up as a very popular tourist destination, and easier international access will drive that.

"These scheduled services represent a significant increase in access to the Gold Coast from China's tier one and two cities via Hong Kong Airlines' extensive regional network, providing yet another opportunity to build on the Gold Coast's share of Australia's highest yielding international market, China," said Mr Winter.

The region has also improved occupancy rates in hotels according to Deloitte, showing a 4 per cent improvement over 2014 and is being regarded as a gateway city to the rest of Australia. It is also the country's fastest improving hotel sector in terms of daily rates. As the cost goes up for a night in a hotel, a drop in occupancy is not recorded.

TSA recorded that there were over 14million domestic overnight visitors to the Gold Coast over 2013-14, paying an average of $293 per night. If this growth continues, and it is predicted to do so, then having a strong foot in the door already having purchased commercial property on the Gold Coast could see great returns coming your way.

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