The manager of Perth's biggest hotel has slammed the WA state government's efforts to promote the city after new figures showed a sharp correction in the performance of its accommodation sector in the first six months of the year.
June figures from global research firm STR show Perth was the weakest capital city hotel market by some margin in the first six months of the year with occupancy rates falling to 73 per cent from 78 per cent last year, and average daily room rates slumping to $172 a night compared with $188.
John Kockan, general manager of the five-star, 486-room Pan Pacific Perth in the CBD, labelled the state of the local hotel market "sad" and "very disturbing", and said there was little prospect of any improvement next year.
"The state government was [until recently] spending $40 million a year on tourism. My hotel marketing budget alone is $2 million a year. It's a joke," Mr Kockan told The Australian Financial Review.
"The tourism sector has been very badly managed here. There was massive demand during the mining boom and people thought it would never end."
Mr Kockan said the state government should look to replicate what has been achieved in Tasmania. "It used to be a bankrupt state except for logging. Look at it now, they have a booming tourism economy, their numbers are huge. People have been asleep here," he said.
"We're fully booked tonight and you'll pay $300 a night but come for the weekend and it drops to $175."
While Perth slumped, the STR figures show the Sydney hotel market continues to climb with occupancy rates above 85 per cent and average daily room rates hitting almost $230 a night, with Adelaide the other strong improver with revPAR (revenue per available room) up 4.2 per cent.
Melbourne remains a strong market with high occupancy rates and a daily rate of more than $185 a night while Brisbane lifted occupancy rates above 70 per cent, but at the expense of weaker room rates.
Perth's hotel market is unlikely to improve materially for a number of years as it absorbs a wave of new supply amid lacklustre demand. Hotel analysts Dransfield forecast more than 3000 rooms – 48 per cent of the current stock – are due to enter the market in the next nine years.
Half a dozen new hotels have already opened this year including a 224-room Aloft Hotel operated by Marriott, and a 126-room Tribe Hotel and 120-room Peppers King Square Hotel, both operated by Mantra Group.
During the next three years, Marriott International, the world's biggest hotel company, will open three new hotels in Perth including a Westin in the CBD, a Ritz-Carlton hotel at Elizabeth Quay, and a Courtyard by Marriott, adding 700 rooms to its limited presence, which includes the Four Points by Sheraton.
Richard Crawford, senior director of development, Australia, New Zealand and South Pacific at Marriott, said the company took a long-term view on Perth in line with its typical 25-year management agreements.
"The STR numbers tell the industry what it already knows, that there has been a correction, which has put downward pressure [mainly] on average daily rate.
Mr Crawford said the extra supply coming on board during the next nine years was a big number in terms of existing stock, and much of it was due in the next few years.
"We're confident demand will absorb it in the medium-to-long term, especially for the luxury product we are offering," he said.
