New hotels in Melbourne to hit occupancy

Australia's tourism industry looks poised to continue its strong growth, but a new report suggests vacancy rates in Melbourne and Perth could creep up as new hotels open.

Thirty-two new properties are expected to open in Melbourne alone over the next two years, adding 6,500 new rooms to its existing stock of about 20,000, according to Deloitte Access Economics partner Adele Labine-Romain.

Melbourne has absorbed a number of new properties in recent years, but the sheer number opening will push its occupancy rate below 80 per cent in 2020, Ms Labine-Romain estimates.

"Travellers to Melbourne and Perth will be able to take advantage of some good prices in those markets," Labine-Romain said. "In the short term there will be some good value."

The overall outlook for the tourism and hotel sector is strong and it will continue to outperform the Australian economy, Labine-Romain said.

The number of international visitors is estimated to grow by 6.2% on average a year by the next three years, with a record 10 million visitors expected next year.

Tourism from China will continue to grow, although not by the double-digit figures of the past five years.

Visits from India are growing the fastest and are expected to rise 13.5% a year for the next three years, according to Deloitte's Tourism and Hotel Market Outlook, released on Thursday. Domestic trips are expected to grow by 3.8%, the report said.