Queensland emerges as the shining star in Australia’s hospitality landscape, clinching top honors in hotel performance for the year 2023, according to insights shared by Gareth Closter, Senior Vice President of JLL Hotel & Hospitality Group.

Gareth Closter

Senior Vice President at JLL Hotels & Hospitality Group

Marking a remarkable achievement in the aftermath of a record-breaking year for tourism and accommodation nationwide, Queensland’s hotel markets have demonstrated exceptional growth. The latest data from STR reveals a significant surge in Revenue per Available Room (RevPAR) levels, with the state securing the top three spots nationally.

Brisbane led the charge with an impressive 46 percent uplift, followed by Cairns boasting a remarkable 34 percent increase, and the Gold Coast securing third place with a commendable 33 percent rise.

The notable spike in RevPAR is attributed to substantial increases in Average Daily Rates (ADR), soaring to remarkable heights of 52 percent in Cairns, 47 percent in Brisbane, and 38 percent on the Gold Coast. Despite challenging circumstances, occupancy rates remained steady, or slightly below, 2019 levels, showcasing a notable generational shift in ADRs across Queensland’s key markets.

Investor interest has been piqued by Queensland’s stellar performance, propelling the state to second place nationally in terms of annual hotel transaction volumes.

The year 2023 witnessed approximately $564 million in hotel transactions in Queensland, constituting 23.2 percent of the overall national sale volume of approximately $2.43 billion for the calendar year. This surge reflects a doubling of the transactional value compared to the previous year, highlighting Queensland’s allure among hotel investors.

Gareth Closter commented on the evolving investor landscape, noting a heightened interest in Queensland’s hotel assets, particularly in the latter half of 2023. He emphasised the state’s value proposition compared to larger markets like NSW and Victoria, underscoring the undeniable growth narrative, particularly in South East Queensland.

Illustrating this trend is the recent sale of the Mercure Kawana Waters, an 81-key hotel on the Sunshine Coast, orchestrated by Mr. Closter. The property, which previously changed hands in 2019, witnessed a staggering 57 percent appreciation in value and settled within 77 days post the Expressions of Interest process, reflecting the dynamic market dynamics in South East Queensland.

The Calile Hotel James Street. Credit Visit Brisbane

South East Queensland emerged as the epicenter of both RevPAR performance improvement and transactional activity, with notable transactions including the Sheraton Grand Mirage Gold Coast, Sofitel Brisbane, and Quest Woolloongabba, among others.

As the future Olympic city, Brisbane shines as the beacon of Queensland’s hospitality landscape. The accolades continue to pour in, with the Calile on James Street recently clinching the 12th position globally by The World’s 50 Best Hotels Academy, further solidifying Brisbane’s status as a world-class leisure destination.

The imminent delivery of the Queens Wharf project, slated for August this year, promises to elevate Brisbane’s allure, amplifying its global presence. With international inbound arrivals anticipated to rise and new hotel room supply remaining stable, Queensland’s hospitality sector is poised for continued growth, bolstered by the impending ‘Olympic effect.’

While challenges lie ahead, including softening macroeconomic conditions and stabilizing hotel performance, Queensland, and especially South East Queensland, are poised to embrace the ‘Golden Decade’ leading up to the 2032 Brisbane Olympics.

Sky Deck at Queen’s Wharf Brisbane, Artist Impression

Gareth Closter highlighted the opportune moment for existing owners to capitalise on historically high levels of divestment, while buyers stand to benefit from potential future market growth. The convergence of these factors sets the stage for an intriguing period in Queensland’s hotel market.