SLOWED regional tourism and pricing that drives leisure tourists out of Perth are two symptoms of stalled hotel development in the city.
Rates go up when hotel rooms are in short supply, often pricing the leisure sector out of the market and acting as a barrier for regional travellers.
In addition, high occupancy rates may sound like a win for hotel operators, but can be as problematic as they are beneficial for the hotel sector overall.
Failing to adhere to international standards and provide a culturally sensitive environment could also be a pitfall for the Perth hotels industry, which is faced with a market tilted towards international travel, principally from Asia.
Those in the industry describe hotels as essential infrastructure – accommodation that forms the basis of the service economy.
“It is essential infrastructure for business, leisure, tourism ... bringing parents out here for the graduation day of their children,” Tourism Council WA chief executive Evan Hall said at the WA Business News boardroom forum.
My Hotels group owner Pauline Tew, who once ran Rottnest Lodge and Outram Street Hotel in West Perth, said anecdotal evidence suggested that access issues regarding hotels in Perth was stifling regional tourism.
Ms Tew recently attended an industry forum in Singapore at which she intended to spruik her Smiths Beach Resort and Injidup Spa Retreat, but after becoming concerned at the lack of interest was told that Perth acts more as a ‘stopper’ than a ‘gateway’.
“Our presentation was good, our properties are beachfront and there is nothing wrong with what we’re doing. They couldn’t get any properties in Perth to stay with so they can’t get to the regional properties,” she said.
While business demand continued to prop up the market in Western Australia, Australian Hotels Association WA chief executive Bradley Woods said the rising room rates resulting from increased corporate demand was hurting the leisure tourism market.
“Western Australia is undergoing this massive period of resources and mining investment and redevelopment and that has substantially increased corporate visitation,” he said. “The counteracting side of that of course is that the leisure and tourist market in Perth and the events market has fallen off over the last two to four years.
“That, in turn, means the demand has not been as great, which means in a competitive market between the corporate business and leisure tourism, the leisure tourist visitor is not able to pay as much as the corporate visitor.”
Midweek v weekend
While seasonality is a major factor hotel operators consider in their business plans, one of the most significant issues in Perth is balancing the current disparity between the jam-packed midweek hotel occupancy rates and lower occupancy numbers on the weekend.
The resources industry is driving those mid-week spikes, but Hyatt Regency general manager Adam Myott was cautious about relying on that market indefinitely.
“You take resources out of the equation and we wouldn’t be talking about building new hotels,” he said.
“This won’t continue forever. If it does soften and there are new hotels that open, we will need to look to new sectors to fill those rooms in winter months or from Fridays to Sundays, and at the moment there aren’t a lot of options.”
One recent development that may provide part of the solution was the introduction of direct flights to Perth from China by China Southern Airlines. Mr Hall said this was one of the most significant happenings of 2011.
“I think fascinating relationships are going to develop,” he said.
“New relationships are going to build and there is no one starting point, it is about people sending their kids here, holidaying here, moving into business events and conferences and being the city that opens up to Asia.”
According to Pan Pacific general manager Grant Raubenheimer, it is important to see the Chinese market as one part of the puzzle.
“Are we looking at China to be the saviour, the be-all and end-all for the weekend business and top up what room stock we have left on the weekdays? I don’t think so,” Mr Raubenheimer told the WA Business News boardroom forum.
“I don’t think we want to put all our eggs in one basket. That is the problem. It is a great win for us that we have China Southern flying in, but what are we going to do with those tourists on the weekend?
“Do we have enough happening in the city to keep those tourists happy? Do we have enough dining options? I think the palette of Perth is not quite as advanced as it is in Sydney and Melbourne.”
Creating culturally sensitive offerings and a collaborative events strategy for Perth and regional WA to entice leisure tourists to regional areas during the week and back to Perth to fill hotels on the weekend were also vital, the forum heard.
“If the Asian market is where we are heading, they have restricted access to leave and they want to maximise every hour they are on leave, they don’t want to take this leisurely Australian approach,” Committee for Perth chief executive Marion Fulker said.
“We have got some challenges to face, thinking about what markets we are serving.”
Ms Tew added that ‘cultural savvy’ was an important element in attracting Chinese tourists.
“If we don’t have Chinese-speaking staff, they will never come here,” she said.
“We get mixed messages here about what we are.
‘‘Naturally I don’t think we will ever be a Sydney, I don’t think we will ever be a Melbourne; but we can be something on our own to an Asian market. It will have to have some quality hotels to come into it.”
That identity crisis has been an ongoing issue for Perth, and Ms Fulker said it was important for the city to decide whether it wanted to be a ‘pass-through’ or ‘destination’ city.
“Because we are a suburban city, and that is what we were planned to be, all of our offerings are in these enclaves which are very difficult for tourists to get a sense of because they are hidden. In great tourism cities they are in a condensed manner,” she said.
Mr Hall reiterated the point that hotels formed the basis for tourism development strategies.
“There has got to be more to it than, ‘if you build it they will come’. You have to look at what is going on the weekend, all that sort of stuff, but if there are no rooms there is no market,” he said.
