The Western Australia city of Perth needs up to 3,000 extra hotel rooms in the next decade, but only 362 are under development, a Tourism WA report says.

Although central business district (CBD) hotels are enjoying occupancy rates of 85 percent, room rates in the state have remained stagnant – in 1996 average room rates were A$177, in 2006 they were A$145.

A Tourism WA spokesman told newspaper The West Australian that room rates need to increase 70-100 per cent to warrant new investment.

Access Economics co-founder Geoff Carmody told a tourism forum this week that dollars matter more than people to WA’s tourism industry.

He says WA’s industry was leading other Australian tourism sectors in growth but was not yet ripe for strong global investment as earning capacity was more important than physical capacity.

“If these hotels are physically at capacity but their room rates are still lower than required to generate an appropriate economic return on the investment in the hotel, then the first step is to consider raising room rates,” Carmody says.

Tourism Minister Sheila McHale say the government intends to release land for 20 new accommodation sites — 14 for new hotels — in WA by 2011.

By staff writer