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Victoria State, Resilient and Strong

South-eastern State Victoria posted a record number of international visitors in 2009, ending the year as the country’s best performing region. Even with an increase in supply, the State’s hotels were able to sustain reasonably good results and now look towards even better growth.

Victoria has broken yet another re­cord, with visitation increasing by 3.5% to 1.5 million visitors in 2009. This is allowed the State to reach its highest ever market share for international over­night visitation to Australia (30%). Inter­national visitor expenditure also grew by 9.1% to $3.8 billion, outperforming key competitors New South Wales (+0.6%) and Queensland (-4.1%).“While many other parts of Australia have seen a downturn in tourism, Victoria is at­tracting more people from overseas, who are spending more and staying longer,” Chief Executive, Tourism Victoria, Gre­gory Hywood told HTR.“Our State Government continues to sup­port tourism in Victoria by attracting the world’s best major events, encouraging investment in new hotels and restaurants and facilitating more air services out of Melbourne Airport, which all help to boost economic activity and protect local jobs. We have a deliberate strategy of attracting events and ensuring a fit with our major events calendar, so that there is something to offer visitors year round.”Major source markets to Victoria continue to be New Zealand, the UK, China, and the US. Meanwhile, the most promising market for future growth is India with a forecasted average annual arrival’s growth of 10.8%, followed by China (7.9%), which should also become the largest feeder market by 2014, then Indonesia (7.7%) and Malaysia (5.9%).“Increased air services available from Asian destinations and Tourism Victoria’s inter­national marketing campaigns over the past decade are paying off. Victoria has secured five new international airlines to fly to Mel­bourne Airport over the last 18 months which provides even more access for inter­national visitors,” added Hywood.Back to business in MelbourneMelbourne performed exceptionally well, with 1.4 million international visitors, up 4.4% from 2008, up 15.7% from 2008 – al­though the domestic market experienced a decrease of almost 4%. Melbourne attracts the vast majority of visitors to the State, being the capital city, main point-of-entry, and focus for arts, culture, theatre, educa­tion, shopping, sport, business and major events.“Major events thrust Melbourne and Vic­toria into the national and international spotlight and elevates our appeal as an at­tractive tourism destination. Melbourne has the greatest share of the lucrative business events industry in Australia and we are now ranked alongside some of the world’s top convention cities including Beijing, Singa­pore and Dubai,” said Hywood.The new $1.4 billion Melbourne Conven­tion Centre is an excellent example of Vic­toria’s initiatives in this sector, becoming the world’s first convention centre to achieve a 6-star Green Star rating. The centre is anti­cipated to inject around $200 million a year into the Victorian economy for the next 25 years.Overall, business events are estimated to contribute $1.2 billion per annum to the Victorian economy and generate 14,000 jobs. “We see as a region business levels impro­ving and consumer confidence continuing to return in the luxury market. Hotel acti­vity has already returned to pre GFC levels. Most of the growth will come from the corporate and MICE segments and time will tell if the recent focus on cost control by companies proves to be a long term shift in buying behaviour,” Marketing Commu­nications Manager, Park Hyatt Melbourne, Elena O'Brien explained to HTR.“We see the potential for growth across all segments due to the general return of business and consumer confidence to mar­ket. Both CBD and regional areas stand to benefit from a general return of confi­dence,” she added.There was also positive news for regional Victoria with international visitor expendi­ture hitting its highest record to reach $313 million, an increase of 15.9%. Although room nights in the entire State decreased by 1.6% to 2.2 million, regional Victoria recorded an increase of 3.9% to 641,300.Australia’s national Tourism Forecasting Committee predicts that 2010 will see inter­national visitor nights to Victoria stabilise, growing by 3.4%, followed by 1.6% growth in 2012. Over the period 2008 to 2018, in­ternational visitor nights to Melbourne are expected to increase at an average annual rate of by 4.5%, while international visi­tor nights in regional Victoria will grow by 2.6% per year.In terms of hotel performances, latest avai­lable figures, year ending September 2009 for hotels, motels and serviced apartments with 15 or more rooms reveal total earnings of $1.4 billion, a 2% drop from the corres­ponding period in 2008.Occupancy rate reached 62.3%, a 2.4 point decrease over 2008, while average room yield reached $156.66, a slight decrease over the $158.30 the year prior. Melbourne hotels recorded a RevPAR decline of 9.5%, driven by an occupancy fall of 5 points to 75.5%, a 3.5% decrease in average rates and almost 3% increase in supply. Current trends show that four and five-star rated properties in Melbourne have higher occu­pancy levels (demand) than those with lower star ratings.New hotel developments As part of a long term strategy, and in or­der to facilitate this expected growth, the State government is planning for major ho­tel developments, encouraging and suppor­ting new investors.Overall there were 819 establishments in Victoria by September 2009, eighteen more than the corresponding period a year prior. Number of rooms available increased by 1,723 to a total of 40,189. “Victoria’s tou­rism industry is expanding with a number of hotel developments under construction. These developments will further bolster the depth and diversity of Victoria’s tou­rism industry,” continued Hywood.Melbourne has seen much of the expan­sion in corporate chain hotels, with a string of major developments recently, including Crowne Metropol, Hilton South Wharf, Olsen and Cullen Art Series Hotels, and the refurbishment of the InterConti­nental Melbourne The Rialto and Grand Hyatt. This is in addition to the opening of the Chifley Doveton, Mercure Caroline Springs and Mantra Tullamarine. Other hotels under construction include the third Art Series Hotel – The Blackman, and Ci­tadines Melbourne on Bourke; all due to open in 2010.“Melbourne has seen and will see a lot of new room inventory and refurbished pro­ducts coming to market over the next 2 years in the 4- to 5-star end of the market. We're are seeing a roll out of new products across all categories; apartment style, 3-, 4- and boutique 5-star, not to mention vast new function spaces. As such, the market is set to become even more competitive,” concluded O'Brien

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