APARTMENT HOTELS
WHILE Australian travellers are already enthusiasts, an untapped market of international visitors – particularly from China and India – is waiting to discover the benefits of apartment hotels. According to the latest IBISWORLD report for Australia’s serviced apartment industry, the challenge for apartment hotels in the next five years will be to make international travellers aware of their existence and the benefits they provide. Report author Ryan Lin says apartment hotels have been the strongest performers in the travel accommodation market over the past decade. But he says the “biggest opportunity” lies in attracting international travellers, who currently make up less than 20% of the industry’s total guests. “While the serviced apartment industry is strongly placed among accommodation service providers, the industry has battled a strong Australian dollar and cheap international airfares for much of the past five years. “These factors are driving Australian tourists overseas at the expense of the domestic tourism market, meaning serviced apartment operators in Australia’s traditional getaway destinations, such as the Gold Coast and Sunshine Coast in Queensland, are struggling.” The report says that demand from both international tourists and business travellers is expected to improve over the next five years, helped by an easing Australian dollar and improving global economic conditions, but more can be done to convince international visitors to use apartment hotels. “As Asian travellers continue to play their part in the Australian tourism market, serviced apartment operators need to find a way to gain a greater share of this market,” the report says. “When travelling to Australia, overseas tourists generally prefer luxury accommodation with higher star ratings and levels of service. This is for a variety of reasons, but mainly because luxury hotels are generally located near main attractions. “The typical international tourist also does not require the self-catering facilities... and hotels in CBD locations have been more successful at marketing to international tourists, assisted by their globally recognised brands.” But Lin says many international visitors are “simply not aware” serviced apartments exist and may not be familiar with the benefits they offer such as greater space, the ability to selfcater, and lower prices. “The industry has proven to be adaptable to consumer preferences in the past and should thrive on this challenge by increasing their provision of top-tier serviced apartments.” He says apartment hotels need to raise awareness among tourists from Australia’s major inbound markets: China, Japan, South Korea, Singapore, Malaysia and India. “Since holidaying abroad is a recent luxury in many of these Asian countries, tourism to Australia is expected to surge over the next five years as middle-class wealth grows,” the reports says, noting that Deloitte Access Economics projects international visitor nights in Australia will overtake domestic visitor nights by 2018. “Serviced apartment operators will boost their comfort levels on offer, and up the luxurious experience if they hope to capture market share in this segment. “Over the next five years, the foreign markets expected to drive growth are China and India. Serviced apartment operators need to adapt to these growing markets so as to appeal to more international travellers.” Currently, more than 50% of nights spent in serviced apartments are booked by holidaying Australians.