Hobart – growth and change

Tasmania is experiencing an unprecedented tourism boom and it is occurring around the state.
Tourists need accommodation, and while the University has been buying up old hotels to satisfy their need for student accommodation new hotels are being built to satisfy the increasing demand.

Hotels are reporting full bookings for the coming summer period, and according to Tourism Industry CEO the log jam is already impacting on tourism growth. One response to this growing market has been the expansion of Airbnb, which has as a consequence affecting more permanent accommodation options. One source advises over 5000 Airbnb guests booked accommodation during the peak summer period earlier this year.

A further response has been the construction of six new hotels with over 1022 rooms, all of which will be opening within the next 18 months. In Hobart, while Airbnb is occurring in the suburbs, the hotel developments are occurring in or near the centre of the city, and this, together with the move of the University to the centre of town is bringing about a change in the character of the city.

The CBD was once a place of commerce. Offices and retail outlets were the order of the day. However, increasing numbers of transient people in the CBD (visitors and students) has led to an increasing demand for food and beverage outlets, and the city is becoming more an entertainment and lifestyle precinct. Once the province of Salamanca and North Hobart, the centre of Hobart is now also catering for eateries and a range of night-time entertainment.

The requirement for CBD office space has remained stable. Even though office activity has increased, the changing nature of work – automation of administrative processes, hot desks, mobile offices etc – has enabled that increase in activity to occur without an increase in demand.

Food and beverage outlets are able to pay a higher rental than most retail outlets, and landlords are charging higher rentals as a consequence. Smaller retail outlets simply cannot compete and retail is being displaced. In some ways this coincides with a change in the nature of retail. As well as a move to on-line shopping, department stores are becoming simply shelf-providers for brand products, while the volume of traffic in Hobart is still not sufficient to maintain and retain high-end brand-specific outlets. As such the number of retail establishments is decreasing.

Retailers complain that parking decisions are making it more difficult to get the customer to the store and the increasing pressure on space is making it more difficult to survive. UTAS researcher Louise Grimmer basically dismisses this argument and suggests that retail needs to adapt to the changing times and become more tech savvy in managing on-line shopping options.
Independent retailers are in fact defying the odds in the current challenging economic environment. The National Retail Association, in conjunction with Vend, recently announced its Remarkable Retailers for 2019 and commented that retailers have to continually find new solutions and ways of working to thrive in a challenging retail landscape.

It is not much value for a retailer to endeavor to attract customers if in fact the surrounding commercial environment does not recognise their contribution. Every action would seem to have an unintended consequence. The ever-increasing demand for services is placing pressure on an already straining infrastructure, and governments have been slow to respond. Growth and change bring their own problems with them.

A virtuous circle or a vicious cycle? The growth on the hotel environment will require trained and qualified staff, yet the training of staff is lagging behind demand. On the other hand, the food and beverage environment will be relying on casual staff, and in fact the casualisation of the workforce occassioned by the tourism boom can lead to reduced disposable incomes which will also impact on the broader retail environment.

Whatever the arguments, the fact remains that the city’s character is changing. New activity replaces old activity. New outlets replace old outlets. New technology replaces old technology. However, what is fundamentally important is that the city continues to be a vibrant living space for its people.