Investing in new Perth hotels is still a risky business despite high occupancy rates and government incentives, according to the Australia head of hotel chain Accor.
Accor Australia chief executive Simon McGrath, in Perth to address a forum of tourism and government officials last night, said hotel developers had to be convinced that demand for rooms could ride out fluctuations in the mining industry.
"WA has the unusual distinction or contradiction of having a booming hotel market, with record profit- ability, but very little new hotel development on the immediate horizon," Mr McGrath said.
"This defies the laws of demand and supply but highlights the concerns that investors have in building infrastructure to support what might be perceived as a somewhat narrow-based economy."
Mr McGrath said that during Accor's 20-year involvement in the WA hotel sector, it had seen many boom and bust scenarios.
"These events made property developers very suspicious about investing in Perth because of its vulnerability to elements that often had nothing to do with the State," he said.
"The mining boom may be propping up Australia's economy but the investment community have long memories and what they want to see is a State with enough diversification to ensure that other markets will pick up the slack in the face of a slowdown in mining-related demand."
Mr McGrath's comments come as new Tourism Research Australia figures show the number of West Australians "holidaying at home" grew 15.2 per cent in 2011-12.
And for the first time in several surveys, interstate holidaymakers increased by 5.3 per cent.
Tourism WA chief executive Stephanie Buckland said growth in the interstate holiday/leisure sector was pleasing."In this survey, WA has outperformed the Australian average figures in interstate visitors, spend and nights," she said. "But what we need to see is sustained growth and Tourism WA is currently putting the finishing touches on the next phases of its domestic marketing campaign to drive that growth."
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