Hotel buying bonanza as Cairns tourism soars
TropicNow looks at the latest multi-million dollar movements in the Cairns accommodation sector.
The Novotel Cairns Oasis Resort is in the final stages of negotiations for a reported $50 million sale in the latest sign our local accommodation sector is heating up on the back of soaring visiting numbers.
Shakespeare Property Group - which bought the Pullman Cairns International Hotel last year for $75 million - is banking on a buoyant tourism industry with its proposed purchase of the Novotel Oasis from American private hotel investor Maritz, Wolff & Co.
The latest big-ticket hotel move follows a string of hotel property sales in recent times.
Rydges Tradewinds Cairns was sold in March in a $34 million play by GA Group Australia, the local division of giant Middle Eastern corporation Ghassan Aboud Group based in the United Arab Emirates.
And some of the CBD's landmark hotels including the Pacific Hotel Cairns and The Hotel Cairns were both sold last year for a combined total of around $33 million.
GA Group Australia is expected to unveil plans for a major overhaul and upgrade of the Tradewinds property in August, while other major hotels in the region such as the Sheraton Mirage at Port Douglas are already undertaking major upgrades to meet growing demand.
Hotel occupancy rates in Cairns are up 6.6% in the year to April, while revenue per available room has spiked by nearly 14% over the same period.
Danny Betros from CBRE, which managed the sale of Rydges Tradewinds and is negotiating the Novotel Oasis deal, said more CBD hotels are likely to be placed on the market in coming months as tourism continued to boom.
"The hotel sector is certainly the most active part of the market, and with better returns and growing demand they are an attractive offer at the moment," Mr Betros said.
"It's unlikely anyone is going to build a new hotel for a very, very long time, and maybe never again in the CBD.
"So these properties being sold recently are going for well below what you could build a new property for.
"There are some significant changes coming to the 4 and 5 star hotel market in Cairns, with some massive refurbs and upgrades coming soon."