Hotel room shortfall in Northern Tasmania by 2020 could be more than 200

High spending visitors coming to Launceston and Northern Tasmania have doubled over the past three years, according to an accommodation supply analysis undertaken on behalf of the Office of the Coordinator General.

To keep up with increasing demand more hotel rooms are needed across the region by 2020 according to all growth scenarios assessed by BDA Marketing Planning, the company engaged to analyse the accommodation sector.

The region could require as many as 592 hotel rooms in Northern Tasmania, 387 specifically in Launceston, to meet projected demand. 

With 108 rooms under construction at the Silo Hotel site and another 250 being considered across the Verge Hotel, the Gorge Hotel and a potential Fragrance Group hotel, there could still be a shortfall of more than 200 rooms.

The report found occupancy in the region is still showing seasonality, with average occupancy as high as 86 per cent in the summer months and more than 75 per cent in Launceston for half the year.

State Growth Minister Peter Gutwein said the study showed the North was a prime area for more investment and development.

“We’ve seen how an increase in visitors has changed Hobart for the better and contributed to an economic boom, now it’s time for Launceston and the North to share the benefits as well,” he said.

“New high-end hotels will boost base demand by some 10 per cent alone. Importantly, high-end hotels with conferencing facilities and a premium offering will also attract more conferences to the North, which would be a real shot in the arm for the region.”

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In the year to June 2016 the average annual occupancy rate was 64 per cent in the greater Northern region and 69 per cent in Launceston, but according to the study larger, higher-rated hotels indicated “significantly higher” rates.

Tourism Northern Tasmania chairman James McKee agreed more focus must be placed on top-end facilities.

“We are really trying to capitalise on those beds not just being stock standard but higher value so that we are able to use what comes on stream in the market as a higher value yield proposition for the region,” he said.

Premium offerings for food, drinks, attractions and ancillary services have now progressed to a point where the market is confident it can support higher-spending visitors, Mr McKee said,

“If you attract a five-star plus visitor, we are confident of the system and offerings around for food and beverages of an equivalent experience,” he said.

Mr McKee said the updated accommodation needs forecast was in-line with visitor figures.