One quarter of Gold Coast hotels, including at least one major resort, are being monitored by insolvency firm PPB due to insolvency fears over the coming months, it was revealed at a Sydney tourism conference yesterday.
PPB director Tony Sims also said the Gold Coast region will take at least three years to recover from the downturn, and is the worst affected area in the tourism industry due a backlog of real estate programs.
“Twenty-five percent of hotels on the Gold Coast are under a careful monitoring program,” he said, adding that most will survive but might need a “work out”.
“Queensland is going to be a long-term challenging issue given the amount of real estate built there.”
Sims’ comments would mean at least 87 hotels and resorts are being monitored, including at least one major tourist resort. He said these attractions were hurting due to the higher Australian dollar, which is leading more Australians to travel overseas.
The comments come after the Coast’s $700 million Hilton Hotel complex was rescued by Brookfield Multiplex and ANZ.
“We are starting to see a number of significant problems in the tourism industry…I think the…problems that are going to emerge are going to be much deeper and will last much longer,” he said.
But Peter O’Reilly, chief executive of Tourism Whitsundays, says the notion is “alarmist” and believes the majority of Gold Coast resorts and hotels are operating well.
“Having those hotels collapse would have enormous impact, but it’s a ridiculous notion. I’ve actually been there for most of last week, and Gold Coast people were quite pleased with the way things have gone. Up north it’s been a bit harder, but times aren’t too bad considering we’ve just come through what was going to be bigger than the Depression.”
“But certainly if that happened, it would have an enormous impact and you would lose quite a large number of jobs, not just directly but indirectly also.”
Peter Barge, global chairman of Jones Lang LaSalle Hotels, also said the rising value of the Australian dollar may have a negative impact on the hotels industry.
“Asian buyers could lose interest by 2010,” he warned, adding that the emergence of bargains in Asia, Europe and the US would attract buyers.
He also added that many Australian resorts are not maintained well and cannot compete with Asian resorts. But he also warned buyers against picking up run-down bargains, saying many banks would not lend money for refurbishment.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
