John Blacklow, Knight Frank Tasmania’s highly experienced specialist consultant for the Tourism & Leisure sector, shares his views on the Hobart Tourism Market.
Tasmania’s tourism boom continues to break records with 1.327 million visitors for the year ending September 2019. Hobart receives around 73% of the visitors to Tasmania, resulting in high occupancy rates as our city struggles to accommodate tourists, particularly from December through to April.
A report commissioned by the Government in 2017 indicated that based on growth targets, Hobart city would require an additional 1,478 rooms by 2020. Since then Macq01 Hotel (114 rooms), Ibis Styles Hotel (296 rooms), and Moss Hotel (41 rooms) have opened, adding 451 rooms to the inventory. However, this has been offset by the loss of the Mid City Hotel (105 rooms) and the Fountainside Hotel (50 rooms) which were purchased via Knight Frank by the University of Tasmania in 2018.
For 2020, construction has commenced on the following hotels:
- Crowne Plaza (opening April 2020) Liverpool Street – 235 rooms
- Vibe Hotel Argyle Street – 142 rooms
- The Tasman Marriott Luxury Collection Davey Street -152 rooms
- Un-named Hotel Elizabeth Street – 80 rooms
- Accor Movenpick Elizabeth Street – 221 rooms
- Fragrance Group Macquarie Street Macquarie Street – 206 rooms
So, by late 2020 Hobart will increase its room inventory by 1,277. This is still 146 rooms short of the growth target. Developers are seeking Development Approval (DA) from Hobart City Council for a number of sites that are proposed for hotels. These include:
- Fragrance Group – Collins Street Hotel DA sought for 256 rooms
- Fragrance Group – Midtown Elizabeth Street DA sought for 214 rooms
- Lenna Courtyard Hotel, Battery Point DA sought for 85 rooms
- Tribe Hotel DA sought for 104 rooms
These proposed developments would add a total 659 rooms, so potentially Hobart could go from an undersupply position to an over supply if all these hotels are approved as is and built, which is unlikely.
Other potential projects in the Greater Hobart area include MOTOWN (172 rooms), Kangaroo Bay (85 rooms), and the Regatta Grounds Floating Hotel (270 rooms).
Never before has Hobart experienced such strong growth in a relatively short time span. Although expansion was inevitable, the question now arises as to whether our present infrastructure can cope, or do we want ‘mass’ tourism? Will our brand be affected? In October 2019 Hobart Airport was sold to QIC and the Netherlands Royal Schiphol Group who will start work on doubling the size of the airport’s terminal.
With other large scale projects on the drawing board such as the Kunanyi/Mount Wellington cable car, MONA expansion, international flights, and the Macquarie Point Development, it is likely that visitor numbers will continue to increase in the medium term.
No doubt there will be much public debate as to the benefits or negatives associated with Hobart’s fastest growing sector.