Land may be released for new hotels

Incentives such as releasing government land specifically for hotels are being considered in a bid to overcome Perth's dire hotel shortage.

Tourism Minister Kim Hames raised the possibility of land releases at an estimates hearing in Parliament yesterday, saying the shortage of hotel accommodation was hampering the growth of tourism in WA.

He said even if Perth had 300 new hotel beds every year for 10 years, it would still have a shortage.

Dr Hames said incentives were needed to make short-stay tourist accommodation a more viable development - because commercial and residential development projects were more attractive. "Another option would be to lease, rather than sell, land for a hotel development to remove the initial capital cost that might deter developers," he said.

Tourism Council chief executive Evan Hall said the lack of hotel rooms was the most critical issue facing WA's tourism industry.

"We are turning people away because they can't get a room," he said. "We are paying the price for years of government inaction."

Mr Hall said it took a long time to build a hotel and so the need for action was urgent. He said allowing hotels to be built "a little wider and a little higher" would make projects more attractive.

Perth's hotel occupancy is about 82 per cent, which Tourism WA chairwoman Kate Lamont said was "full".

But recent research by Deloitte indicated this could rise to 88 per cent this year - the nation's highest.

There are about 12,000 hotel rooms in the metropolitan area, including about 4000 in central Perth.

Dr Hames has asked Tourism WA to make hotel development in Perth a top priority.

His comments came amid doubts over a planned five-star hotel on Rottnest Island, with the developer unable to secure funding for the project.

Developer Pinctada Hotels and Resorts has until June 30 to raise finance. Managing director Marilynne Paspaley said the project was still being negotiated and funding could not be finalised until the talks with the Government were finalised.

She said financiers were keen to proceed once the talks concluded. "The project is highly regarded and has international interest," she said.