Landing the Olympic Games is like “hitting the jackpot” for hotel developers with the number of new projects expected to skyrocket in Brisbane by 2032.
Research by STR found that in the past two decades the hotel supply in Games host cities grew markedly, with a focus on upper- and mid-scale rooms.
The biggest number of new hotel rooms was in Rio de Janeiro in 2016 when Brazil hosted the Olympics just two years after the FIFA World Cup.
The supply increased by 16.8 per cent, or 31,960 rooms, however, “the issue for the market was filling those rooms once the event had passed”, according to the research.
This compared to Sydney, which had a 4.1 per cent increase with 39,125 rooms, however, after the event in 2000 demand for hotel rooms only declined by 0.9 per cent.
Twelve new hotels are in the pipeline for Paris in time for the 2024 Olympics, adding 1647 rooms—this relatively small number due to the city’s extensive inventory, which is expected to grown larger as the event nears.
On the back of the Brisbane Olympics, new hotel developments are expected to stretch from the Gold to Sunshine coasts in precincts surrounding proposed venues.
New hotel room supply in Olympic host cities
Source: STR, summer games
The athlete’s village in Hamilton Northshore will have more than a dozen towers, which will be converted to residential apartments after the Games, while Southbank and Roma Street will undergo rapid transformation.
Developers in the region are looking beyond recent results for the hotel sector which saw the occupancy rate drop to 36.9 per cent in Queensland for August, according to STR.
The industry was hampered by border restrictions and lockdowns, which are expected to lift when Queensland officially reopens to vaccinated travellers on December 17, if not earlier.
However, the impact of another major pandemic could change everything, just as it did in Tokyo—in that city development timelines were pushed back, but hotel supply increased 5.1 per cent.
Although Covid seriously affected the hotel sector globally, it still drove investment activity in the first half of 2021 in Japan, Korea and Australia, according to CBRE.
One of the biggest deals was the sale of the Travelodge portfolio for $620 million to the Salter Brothers under the GIC and Partners Group joint venture.