Conditions are ripening for a resurgence of investment activity in Queensland’s tourism sector, as the lower Australian Dollar and increased visitor numbers entice foreign property developers to look at investing in some of Queensland’s iconic seaside resorts.
BDO recently held its 2015 Queensland Economic and Political Update (video link here), at which the state’s $23 billion tourism industry was identified as a key sector for investment growth in the coming years.
If the Australian Dollar continues at current levels or weakens further, both the number of Australians holidaying domestically as well as inbound international tourists is expected to rise.
Already, the signs are positive for a post-GFC return to increased international travel. Globally, international travel is on the up, with the UN World Tourism Organization reporting a 4% increase in international tourism arrivals in the first half of 2015, and the Oceania region leading growth in Asia and the Pacific with a 7% increase.
In its International Tourism Snapshot for the year ending June 2015, Tourism and Events Queensland reported a 7.7% growth in international visitors to Queensland, higher than the 6.6% Australian average and the 6% jump in New South Wales. Regionally, there was double digit international visitor growth in Townsville (26.7%), Fraser Coast (14.1%), Southern Great Barrier Reef (10.8%), Sunshine Coast (10.6%) and Whitsundays (10.2%). In terms of expenditure, international visitor spending increased to a record $4.6 billion or 14.8% in Queensland, higher than the national average of 11.3%.
In terms of Australian travellers, Tourism and Events Queensland’s Domestic Tourism Snapshot for the year ending June 2015 indicated business travellers to the state increased by 28% over the past year, and travellers visiting friends and family were up 7.4%. While holidaymakers decreased by 6.5%, this will be a key category to watch over the coming year in line with the falling Australian Dollar.
The future looks bright
These statistics certainly bode well for both domestic and international investment in the sector, including from key trade partners like China, Japan and the US, for which the prospect of solid returns built on the lower Australian Dollar will make the market more enticing.
In the coming months Queensland will see an increase in tourism and tourism service providers who are in a prime position to capitalise on these opportunities. A key consideration these businesses will need to consider is identifying their unique selling point which will set them apart from the rest of the market.
The US Dollar is currently buying about AUD$1.43, a jump from the AUD$1.14 mark just 12 months ago, and about AUD$0.93 in July 2011. The Chinese Yuan meanwhile has gained from AUD$0.19 in September 2014 to currently sitting around the AUD$0.23 in the last year.
We are seeing a number of foreign property developers showing strong interest in Queensland and from recent announcements, a number have already taken the plunge.
International investors looking at iconic regions
Hong Kong-based Fullshare Group is redeveloping resorts along the Queensland coast including the Sheraton Mirage in Port Douglas. The Dalian Wanda Group and the Ridong Group are developing the much-publicised Jewel on the Gold Coast and only earlier this week the Gold Coast City Council gave the green light for the development of the Gold Coast’s tallest tower which is yet to be named and is to be developed by a China-based conglomerate Forise.
Existing hotel operators should be looking to leverage their current investment by directing funds into refurbishments, new or tailored dining and leisure facilities, technology and marketing.
Modernising architecture, interior design and décor, as well as tailoring facilities to target a growing or niche market is one of the most effective ways to differentiate within the tourism market and to compete on an increasingly global stage.