Cairns accommodation sector outperforming every other Australian hotel market

A new research report confirms what investors have known for some time: the Cairns hotel market is performing stronger than any other major market in the nation.


A new accommodation research report has found Cairns is outperforming every major hotel market in Australia.

The report by Knight Frank described the Cairns market as being in a “renaissance” period, with all performance indicators including occupancy and average daily room rates experiencing significant growth over the past few years.

The report confirms more than $200 million worth of hotel assets have traded since May 2015 in a reflection of investor confidence.

Key findings of the report include: 

  • Occupancy across the Cairns hotel market has increased from 68.6 percent in 2012 to 83.3 percent in August 2016
  • Recent individual months have recorded occupancy upwards of 90 percent. 
  • Tightening occupancy rates are flowing through to average daily room rates (ADR)
  • In the year to August 2016, the ADR across Cairns measured $136.96, up 7.2 percent on the eight months equivalent prior, and 16.7 percent above the August 2012 YTD figure
  • Revenue per available room (RevPAR) averaged $114.02 in the year to August 2016, up 13 percent compared to the same period in 2015, and 41.5 percent since YTD 2012

Knight Frank’s director of research and consulting Paul Savitz said Cairns was one of the “standout performers” in the nation’s hotel market.

“Off the back of increased hotel requirements from both domestic and international visitors, the Cairns hotel sector has transformed into a market of renewed opportunity,” he said.

“Over the past five years, there has been a significant pick-up in the demand for Cairns hotel accommodation, reflected by the strong performance in room occupancies and an increase in average daily room rates.

“One of the main driving forces has been the depreciation of the Australian Dollar (AUD), which has made international travel relatively more affordable to those countries with currencies closely linked to the US Dollar (USD), such as the Chinese Yuan Renminbi.

“As the AUD has weakened against the USD, occupancy across the Cairns market has trended in a positive trajectory. The depreciation of the AUD has also increased domestic travel as overseas vacations for Australians became comparably more expensive.”

The report also noted the city’s predicted population growth over the next decade would also fuel economic growth.

“With the Cairns population expected to grow by 30,500 over the next 10 years (2016-2026), or by 19 percent, at which point almost 195,000 will live in the Cairns local government area, the next phase of growth opportunities in the hotel sector will be underpinned by domestic tourists visiting family and friends and an increased CBD business presence,” the report reads.