New hotels on hold

GOLD Coasters hankering for some local silver service could be waiting some time according to a hotel expert.

Colliers national director valuation hotels Baden Mulcahy said while the Glitter Strip had seen a flurry of recent sales activity, it could be a while before locals saw six-star hotels rising above their favourite beaches.

Mr Mulcahy said Gold Coast hotels were still selling for below replacement cost, a move that was helping stifle new development.

“It’s hard to justify the cost of building a new hotel,” he said.

“When you look at recent developments across the Coast the cost of the Hilton was subsidised by the sale of apartments.

“That’s not to say a raft of new developments won’t happen, but it could be years be- fore it happens.” The comments come despite the latest Colliers International Hotels Research and Forecast report showing hotels on the Glitter Strip have experienced a 4 per cent lift in demand, fuelled mainly by Chinese tourism worth an estimated $7 billion a year to the Australian market.

But while the signs are good the report noted demand growth had only pushed occupancy levels on the Gold Coast into the low 70 per cent range. Mr Mulcahy said Coast hotels had shown improvement in the past couple of years, helped by the Chinese inbound tourist market.

“The Gold Coast market has improved over the past couple of years in terms of occupancy which has pushed into the low 70 per cent range,” he said.

“That has led to room rate growth in the market with revenue per room growth of about 9 per cent which is exceptionally good.

“There’s a bit of excitement around the Commonwealth Games and off the back of that there is investment into new developments like Jewel and Banyan Tree’s site on the northern end of the Gold Coast which they are looking to develop for one of their new hotel brands.”

He said it could still take some time before the Chinese tourist market sparked development similar to the Japanese-led explosion of the 1980s.