The growing prosperity of emerging international markets such as China, Korea, and India as well as the deregulation of international air routes is creating opportunities for investment in the hospitality industry, according to a local fund manager operating in the sector.
The hospitality industry will experience a similar phenomenon as the local mining sectors where it will be sheltered to a degree from economic downturns in Europe and the US due to strong demand from emerging Asian markets, Abacus Hospitality Fund director Paul Lonergan said.
He feels the deregulation of air routes will work to reinforce this situation through the exposure to more tourist markets.
“The more than doubling of the approved frequencies of the Middle East carriers that will come into play by 2011 is important because the reach they have right through Europe,” Lonergan said.
“More recently we’ve seen the liberalisation of the aviation agreement between Australia and the US which is going to enable additional carriers onto that route.”
The increased capacity of new aircraft like the new Airbus A380 would further help the growth in tourism, Lonergan said.
The main area presenting investment opportunities to take advantage of the situation was the provision of accommodation in the major Australian capital cities.
While he admitted the recent strengthening of the dollar may have deterred tourists from some global regions, such as Japan, Lonergan feels the currency movement has had no real effect on the European tourist market and will not have a significant affect on the sector in general over the longer term.
