Mr Gough, who has returned to the firm as a director following a 10 year stint in Melbourne, believes there is momentum in the sector that will keep it profitable, despite signs of lower inbound tourist numbers.
His belief has been boosted by new data which shows that global hotel prices increased by 4 per cent in 2011, according to the latest Hotels.com’s Hotel Price Index, predominantly due to continued strength in the corporate travel market.
David Roche, president of Hotels.com, said prices in Australia rose 9 per cent to an average $166 per night, ranking Australia equal third with Denmark on the list of countries with the highest hotel price rises.
The Hotel Price Index is a regular survey of prices in major destinations across the world. It is based on bookings made on Hotels.com and prices shown are those paid by customers (rather than advertised rates) in 2011. Mr Gough said occupancy and room rate growth in most capital city central business district markets would continue in 2012. Mr Gough said research by data advisory firm IPD Australia and the Property Council of Australia, showed that hotels delivered a total return of 17.8 per cent in 2011, compared with an average 10.5 per cent return experienced in the whole commercial property market.
Mr Gough added the increased activity in the hospitality sector had attracted sovereign and overseas funds to invest in new developments.
“We are now seeing activity in the development of branded mid-scale 3 and 3.5 star hotels due to a number of factors including consumer demand, lower construction and operating costs, as well as reduced investor and financier risk”.