Recovery forecast for hotel revenue in FY15

Recovery forecast for hotel revenue in FY15Dransfield Hotels & Resorts expects hotel revenues in Australia to bounce back in FY15 after a disappointing FY14 when markets slowed to 0.7 per cent revenue growth.Dransfield’s ‘Hotel Futures 2015’ report, which provides a forecast of hotel revenues for Australia’s 10 major cities through to 2023, reveals that revenue growth for FY14 was well below the expected 5.5 per cent. Last year was a “surprisingly poor year”, according to the report, though results were partially influenced by a change in Australian Bureau of Statistics reporting processes.Results for resources-centric cities were down, in particular, with Perth and Brisbane both recording significant declines of -11.4 per cent and -8.4 per cent, respectively. Results were partially offset by strong performances in the key markets of Sydney (5.9 per cent) and Melbourne (5.6 per cent).The report indicates an upgrade to growth expectations from the lower FY14 base, with the Australian market forecast to experience 4.0 per cent RevPAR (revenue per available room) growth for FY15. The major markets are expected to remain strong, while the mining-related markets are expected to continue to struggle through FY15. The report also indicates that the Australian hotel market is stable, with medium-term RevPAR growth (to FY17) expected to average 4.6 per cent per annum. Supply growth of 2.9 per cent per annum is below previous expectations of 3.7 per cent, while demand growth of 3.3 per cent is in line with previous expectations.The long-term outlook to FY23 is for RevPAR in Australia’s major cities to grow at an average of 4.4 per cent per annum, representing an upgrade to prior expectations in both absolute and growth rate terms.To download the report click here