Queensland Executive Director Jess Caire said the Are we there yet? report showed a subdued investment market in new hotels, coupled with ongoing construction challenges and dwindling productivity were making it difficult for Queensland to reach its full tourism potential.
"Queensland may be known as the Sunshine State, but without more hotels many tourists will have to take our word for it because there simply isn't enough rooms for them to come and see it for themselves," she said.
"Our research shows that between 2019-2024 only 820 new hotel rooms were delivered in Brisbane compared with 7,500 during the preceding five years.
"While the COVID pandemic no doubt contributed to the fall in new hotel rooms, ongoing construction challenges have been identified as the greatest barrier, with the cost of building a hotel room increasing by almost 40 per cent over the last five years.
"Add to that an outdated tax regime that actively discourages the kind of investment hotels rely on, coupled with planning hurdles and rising operating costs, and it is no surprise that the hotel pipeline has all but dried up, with only 618 new hotel rooms currently under construction in Brisbane.
"The State Government's recently released Destination 2045 plan sets a target of 2000 rooms a year for the next 10 years across the State to achieve the goal of doubling the value of visitor expenditure to the state's economy to $84 billion.
"This lofty target shows how critical hotels are to our tourism sector, highlighting the importance of turbocharging development so we don't miss this golden opportunity."
Ms Caire said the Are we there yet? report showed that Queensland's strong program of events and new international flights, were pushing up hotel occupancy and room rates.
"Queensland's role as a tourism hotspot is undeniable, and recent major events have helped raise our profile along with occupancy and room rates," she said.
"This year's NRL Magic Round alone increased hotel occupancy by 22 per cent and increased hotel room revenue by $14 million.
"Meanwhile recent new international flights into Brisbane are predicted to add an extra 267,000 room nights by the end of next year.
"These figures reflect just how sought after we've become. With surging occupancy levels pushing our existing hotels to the limit, the case for incentivising new investment in hotel development is clear, without it we risk missing the moment to leverage our reputation as a global tourism destination.
"With a 40 per cent increase in international tourist arrivals expected during the 2032 Games, we need bold policy changes if we are to build the hotels needed to accommodate these visitors."
To ensure Queensland can build the extra hotels needed to realise our full tourism potential, the Property Council is calling on government to adopt the following policy changes:
- Attract and retain essential investment, through incentives that waive Foreign Land Tax Surcharge (FLTS) and Additional Foreign Acquirer Duty (AFAD) for developments that directly unlock supply across key asset types and deliver meaningful economic and social benefits for Queenslanders.
- Work with local governments across Queensland to deliver investment incentives by reducing upfront costs such as infrastructure charges and rates to stimulate supply.
- Investigate government backed lending pathways or subsidies to offset the capital investment needed to build new hotels.
- Work with industry to create a coordinated investment attraction campaign to secure national and international investment in all Queensland property, including our hotel sector.
- Fast-track planning approvals for new hotels by providing planning and building flexibility, including for mixed-use developments and precincts that include a hotel.
- Undertake an audit of government and council land, including in existing Priority Development Areas (PDAs) and collaborate with industry to deliver mixed used precincts that incorporate hotels.
