HOTEL operators are seeing a rise in demand for rooms thanks to an inflow of overseas tourists and the perennial low supply within the popular three- to four-star properties.
But investors continue to scour the market for good assets. The latest deal still being worked on is the sale of the Mantra Group, which was the former Stella business.
The data room for bids for Mantra has closed with offers said to have been received from hotelier InterContinental Hotels Group and private equity group Archer Capital.
Hotel analysts have speculated that the bids included offers for the whole company and could include structures where current owners CVC Asia Pacific and UBS retained an investment.
Despite the potential ownership change, the group has recently reported strong end of financial year results, with a 9 per cent growth in earnings to reach $60.6 million.
The chief executive of Mantra, Bob East, said in the results report that the overall room revenue across the group's Australia and New Zealand network of Peppers, Mantra and BreakFree hotels increased by 6.2 per cent on last year.
That reflected a growth in revenue per available room of 5.8 per cent across the group's 22 central business district properties, including 2 Bond Street, Sydney, and 5.2 per cent across more than 85 resort properties, while the average daily rate grew by 1.7 per cent.
''Mantra Group enters the new financial year in a strong position following what has been a year of great growth for the company,'' Mr East said.
''We reached beyond our targeted earnings, added four new properties to our Peppers brand and increased revenue despite reducing our room stock following strategic divestments to strengthen brand equity.''
The improved results are indicative of the market where the country's capital city hotels continued to achieve exceptionally strong occupancy levels.
According to Jones Lang LaSalle Hotels' review of the latest STR Global data, the solid growth performance in 2012 mirrored that of 2010 and 2011.
The chief executive of Australasia, Jones Lang LaSalle Hotels, Craig Collins, said that all of Australia's capital city CBD markets were maintaining strong year-to-date June occupancy levels at an average of 85 per cent.
''The strongest of our capital city markets are trading at or near to full capacity, and historically, such trading conditions have been the catalyst for hotel operators being able to drive average daily rates upwards,'' he said.
''The best performer in terms of ADR so far this year has been Perth, where growth of 14.1 per cent has been achieved - slightly above the 12 per cent growth posted over the 2011 calendar year.''
Almost all capital city CBD markets posted revenue-per-available-room gains over the first six months of this year, with Perth (20.4 per cent), Darwin (10.8 per cent), Brisbane (5.2 per cent) and Canberra (2.8 per cent) all leading the way.