Backpacker accommodation Gold Coast: New report reveals shortfall of hostels

Gold Coast city leaders are looking to backpackers to boost the tourism sector after a new report revealed something shocking about the cash-cow industry. FIND OUT MORE

The Gold Coast has a dramatic undersupply of backpacker and budget accommodation, with a new report warning the city needs more to support its $7.8bn tourism sector.

The report, by independent property company M3, shows there are just 12 hostels in the city, with plans for only a few more.

City leaders say planning is underway for a new strategy which would see the number of hostels increase to match visitor numbers.

The report notes the city is missing out on a small but important market which could pour more money into the economy.

“The budget traveller and working holiday tourism market is only a small part of the overall tourism market, however, it is nonetheless an important part given that the Australian government granted 224,431 Working Holiday Maker (WHM) Visas alone during the 2023 financial year,” it reads.

Women are invited down to Pottsville on Saturday to take part in forest bathing.

“According to Tourism Research Australia (TRA) there were around 29,082 WHM travellers to Surfers Paradise alone in the twelve months to March 2024.

“Given that there are just 12 backpacker hostels and many reports suggesting that obtaining

a bed at short notice in a backpacker’s hostel on the Gold Coast is either impossible or very

expensive, there is a pronounced gap in the market considering the number of budget travellers and the total size of the Gold Coast tourism market.

“This represents a sizeable opportunity for operators to enter the backpacker market.”

Of the 12 existing backpacker hostels, eight are in Surfers Paradise, two are in Southport, one at Coolangatta and Bilinga.

The largest, and oldest, is the six-level Bunk hostel in Surfers Paradise which began operating in 1999.

Mayor Tom Tate said the shortfall needed to be rectified.

“We are looking at a whole range of areas where we can diversify our tourism offerings, including eco-tourism, luxury, events and sports tourism and broadening our backpacker market supports our diversification strategy,” he said.

The Environment and Tourism Minister Andrew Powell met with the Mayor of the Gold Coast Tom Tate earlier this month. Picture: Nigel Hallett

“In recent times the city has undertaken studies into the planned reinvestment of local accommodation providers in hotel refurbishments and upgrades to meet consumer and market needs.

“In addition to this, we are part way through the development of the city’s new Destination Management Plan, in partnership with Experience Gold Coast, which will inform the high-level strategies for meeting both supply (accommodation and attractions) and demand (visitors) over the coming years.”

A handful of other proposals are currently before city leaders.

Plans were revealed in October to convert Surfers Paradise’s X Galaxy building, formerly known as The Galleria and the Piazza, into a 120-bed “pod” hotel with its long-disused former shops turned into short-term accommodation.

Sitting below the Cali Beach Club, its visitors will be restricted to stays of less than three consecutive months.

The building sits on the corner of Elkhorn Ave and Surfers Paradise Blvd.

Among those investing in the backpacker market is former Tourism Australia boss and Mantra Group CEO Bob East.

Bob East Picture, Portia Large.

Mr East is now the chairman of new company Leisure Accommodation Collective Australia which operates brands including Drifter and Village.

He said the market was a growth area post-Covid.

“We see it as a solid and sustainable market as airlines increasingly take to the skies and replenish the capacity, the youth market will mobilise quickly, if not the fastest of anyone,” he said.

“It’s a great thing to encourage people to travel.”