INVESTORS are afraid to build new hotels in Australia despite record-high occupancy rates in case the mining boom ends and they are left unable to fill beds, a leading tourism figure has claimed.
Accor Asia Pacific chief operating officer Simon McGrath said Australia needs to offer more to the leisure market to create demand long-term.
"They're concerned it's too over reliant on one market segment being the mining segment," he said.
"They think if there's a change in government or if China slows down there's no other back up or alternative market segment.
"We need to diversify the market and give much more confidence to investors that it's not just off one market segment."
The occupancy rate in Sydney and Perth is predicted to rise to 88 per cent by 2015, according to the latest Deloitte Access Economics Tourism and Hotel Outlook report.
Melbourne is tipped to rise to 85 per cent, Brisbane 80 per cent and Adelaide 75 per cent and the Gold Coast 66 per cent.
Mr McGrath told a tourism forum at The Hotel School Sydney that Australia was improving when it came to attracting leisure travellers for sporting events and entertainment so hotels weren't as reliant on business travellers.
He said Saturday nights were now the busiest nights of the week for many CBD hotels.
"Fifteen years ago it was Tuesday to Thursday," he said.
But while Australia had focused too much on traditional markets such as Germany, the UK and Japan in the past, it now needed to focus on China and India, which are seeing the kind of rise in the middle classes similar to what happened in Australia 15 to 20 years ago.