Hotels running near capacity

PERTH'S hotel market may be the busiest in the world, but despite record occupancy rates and growing demand for hotel rooms, no new major hotel developments are planned for the city.

According to Tourism WA's latest tourism accommodation development register, there are 29 projects either being planned or under construction in the Perth region, potentially adding 1,464 lettable units at a cost of $469 million.

But only two projects have been slated for the Perth CBD - the Seasons of Perth expansion project and the Elan Riverside Pier Hotel.

Commencement of the $30 million addition and refurbishment of the Seasons of Perth Hotel, adding 70 apartments and a tower block, has now been delayed until June 2010.

Construction of the $70 million, 86-room Elan Riverside Pier Hotel, which has been beset with problems and delays since it installed pilings into the river almost two years ago, is expected to resume in December, according to the register.

Tourism Council of WA president Scott Henderson said that while the lack of major hotel projects planned for the city was a concern, the higher room rates resulting from high occupancies was encouraging.

"[High occupancies] are bringing our room rates up and hopefully will provide an environment where investors can see there'll be a good return in Perth," he said.

"It's good the environment for new investment is improving." According to the Deloitte Global Performance Review report released last week, Perth recorded an 85.1 per cent occupancy rate for 2007, elevating it to top ranking on the global occupancy index.

But despite a strong performance in occupancy rates, Perth failed to make the top 20 on the revenue per available room index, despite double digit RevPAR growth for the year.

Perth hotel analyst Alan Boys predicts that, on current demand, Perth would need to build a new 250-plus-room hotel every year for the next decade, starting next year.